Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Colwyn Bay Urban District Council Bill [Lords](changed from " Colwyn Bay and Colwyn Urban District Council Bill [Lords]"),

As amended, considered; to be read the Third time.

Margate Corporation Bill [Lords],

Scottish Widows' Fund and Life Assurance Society Bill [Lords],

As amended, to be considered Tomorrow.

West Hampshire Water Bill [Lords],

As amended, to be considered Tomorrow, at a quarter-past Eight of the Clock.

Great Western Railway Bill (by Order), London Electric and Metropolitan District Railway Companies Bill (by Order),

Southern Railway Bill (by Order),

Consideration of Lords Amendments deferred till Friday.

Edinburgh Corporation (Streets, Buildings, and Sewers) Order Confirmation Bill [Lords] (by Order),

Third Reading deferred till Tomorrow, at a quarter-past Eight of the Clock.

Oral Answers to Questions — RUSSIA (BRITISH CLAIMS).

Mr. RENNIE SMITH: 4.
asked the Secretary of State for Foreign Affairs whether any British subjects have lodged claims for arrest by the Soviet Government subsequent to the landing at Vladivostok, Murmansk, or Archangel of
British naval or military forces; and whether His Majesty's Government intend supporting these claims when a settlement of outstanding questions is being negotiated with the Soviet Government?

The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Austen Chamberlain): The answer to both parts of the question is in the affirmative.

Oral Answers to Questions — GERMAN DISARMAMENT.

Mr. R. SMITH: 5.
asked the Secretary of State for Foreign Affairs what is the nature of the note which has been recently addressed by General Walsh, head of the Inter-Allied Military Control Commission, to Germany on the subject of German armaments?

Sir A. CHAMBERLAIN: In view of the recent reports that have appeared on this subject in the Press, I took the opportunity to make inquiries as to the facts of the case. The result has been what I anticipated. No note of any special character has been sent by the Commission of Control to the German Government recently.

Mr. SMITH: May I take it that the condition of disarmament in Germany is entirely satisfactory?

Sir A. CHAMBERLAIN: No, Sir; I am sorry to say, no.

Oral Answers to Questions — CHINA.

ANTI-BRITISH BOYCOTT.

Mr. SAKLATVALA: 6.
asked the Secretary of State for Foreign Affairs whether the opening of negotiations through British delegates, Messrs. Kemp and Halifax, with the Foreign Ministry of the Canton Government on the questions of anti-British trade boycott and the Hongkong-Canton strike, is to be followed by a formal recognition of the present de facto Government at Canton?

Sir A. CHAMBERLAIN: I would ask the hon. Member to refer to my reply to the hon. Member for Penistone (Mr. Rennie Smith) on the 12th July.

Mr. SAKLATVALA: Does the right hon. Gentleman see that there is a difference between that question and this
one? My question refers to the departure of the British delegates and their meeting with representatives of the Foreign Ministry at Canton, which took place on the 15th July, after the date on which the other question was put.

Sir A. CHAMBERLAIN: My answer applies equally to this question.

WUCHOW (CLOSING OF PORT).

Mr. TREVELYAN: 8.
asked the Secretary of State for Foreign Affairs whether he is aware that the British senior naval officer at Wuchow closed the port of Wuchow to Chinese shipping for 10 hours on 24th June last; whether this step was taken after consultation with His Majesty's Government; whether a demand for an apology and for compensation has been received; and what action His Majesty's Government proposes to take

Sir A. CHAMBERLAIN: The facts are these: After the murder of Mr. Philips, a British subject, three of His Majesty's ships were proceeding, at the request of His Majesty's acting Consul-General, to the neighbourhood, to investigate the circumstances of the crime. The Canton Government had ordered local authorities to afford them all facilities.
At Wuchow, however, an anti-foreign organisation, which the local authorities appear at first to have been unwilling or unable to control, caused obstruction by preventing the engagement of pilots. After several days' fruitless negotiation, the senior naval officer was obliged to resort to other measures, and took steps to close the port. It proved unnecessary, however, to stop any shipping as the pilots were furnished, and the ships proceeded.
With regard to the last two parts of the question, His Majesty's Government still await detailed information, but in view of the instructions issued by the Canton Government that facilities should be provided, they are inclined to consider that the responsibility for the incident lies with the local Chinese authorities.

Mr. TREVELYAN: Is there a precedent for naval officers using their discretion in relation to foreign Powers in this way without reference to the Government at home?

Sir A. CHAMBERLAIN: There is plenty of precedent for the use of their discretion by naval officers. Happily for the British Empire and the peace of the world, they have shown themselves very capable of using their discretion.

ABYSSINIA.

Colonel DAY: 9.
asked the Secretary of State for Foreign Affairs whether any protests have been lodged in respect of the recent Treaty between Great Britain and Italy regarding the opening up of Abyssinia?

Sir A. CHAMBERLAIN: No, Sir.

Colonel DAY: Can the right hon. Gentleman say whether France has signified her intention of lodging a protest with the League at Geneva?

Sir A. CHAMBERLAIN: Oh, no Sir; certainly not. There was an official or semi-official communiqu6 published by the French Government in the French newspapers a short time ago, and I do not think any trouble will arise.

Captain WEDGWOOD BENN: Have any negotiations been begun with Abyssinia: with respect to the British-Italian Agreement?

Sir A. CHAMBERLAIN: Communications have passed, but we have not entered upon negotiations at present. I have given an explanation in this House, which I have taken care shall be repeated to Ras Tafari, and I hope it will remove any misconception that was aroused in his mind by the original Note.

Oral Answers to Questions — ROYAL NAVY.

His MAJESTY'S SHIP "KING GEORGE V."

Lieut.-Commander KENWORTHY: 12.
asked the First Lord of the Admiralty whether, as the terms of the Washington Agreement would be observed by cutting the guns and destroying the turbines of His Majesty's Ship "King George V," instead of breaking her up, thereby enabling her to continue to perform a useful service as a training ship for seamen, boys and other naval ratings, this course can be considered, in view of the fact that this ship led the line at Jutland?

The FIRST LORD of the ADMIRALTY (Mr. Bridgeman): The hon. and gallant Member appears to be under some misapprehension as to the interpretation of the Washington Treaty, as according to Chapter IT, Part 2, II (a) and (b), a vessel must either be permanently sunk, or else broken up, before she is regarded as scrapped.

YARDCRAFT SERVICE ABROAD.

Mr. KELLY: 15.
asked the First Lord of the Admiralty the number of native roasters, mates and engineers employed by the Admiralty on yardcraft vessels at Singapore, Hong Kong, Gibraltar, Malta and Bermuda in June, 1925, and June, 1026, and what are the weekly hours worked by these men?

NUMBERS OF LOCALLY ENGAGED MASTERS, MATES AND ENGINEERS OF YARDCRAFT EMPLOYED JUNE, 1925, AND JUNE, 1926.


—
Singapore.
Hong Kong.
Gibraltar.
Malta.
Bermuda.




1925.
1926.
1925.
1926.
1925.
1926.
1925.
1926.
1925.
1926


Masters
…
None
7
None
None
2
3
7
6
3
3


Mates
…
None
8
None
None
2
2
8
12
3
3





Serangs










Engineers
…
None
8
5
5
10
10
27
35
6
6

Mr. KELLY: 16.
asked the First Lord of the Admiralty the number of mates having at least 15 years' service with the Admiralty who have been reverted to the position of able-seamen; the number of first-class engineers who have been reverted to the position of second and third-class engineers in the yarderaft service; and will he consider offering these men the opportunity to fill yard-craft posts abroad?

Mr. DAVIDSON: I assume that in the first part of the question the hon. Member refers to mates in the yarderaft service; no mates or engineers occupying permanent positions in the yard-craft service have, so far as I am aware, recently been reduced from those permanent positions. Owing to various changes and reductions in the number of vessels employed in the yardcraft service, a number of men who were holding "acting" positions as mates and engineers have been reverted to their

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Mr. Davidson): I will, with the hon. Member's permission, circulate in the OFFICIAL REPORT a statement giving the particulars asked for in the first part of the question. The crews of yardcraft vessels are not employed under the same conditions in regard to working hours as men in workshops, and the number of hours of actual work per week depends upon the circumstances in each case.

Mr. KELLY: Are there any particulars at the disposal of the Admiralty indicating the average number of hours worked by these people?

Mr. DAVIDSON: If the hon. Member would put down that question, I will answer it.

Following is the statement promised:

substantive grades during the last few years; the number of such reversions cannot be stated without a detailed investigation over some given period. Men who have served satisfactorily in "acting" posts are, if they volunteer, given special consideration for appointment to yardcraft ports abroad when vacancies arise which cannot be filled by MPG already on the spot.

Mr. KELLY: Are we to understand that vacancies in any of the dockyards abroad, so far as yard craft are concerned, are offered to men at home? Have they the opportunity of volunteering for them?

Mr. DAVIDSON: Yes, but consideration has to be given to those men on the spot who are suitable.

EXCESS ALLOWANCES (RECOVERY).

Mr. N. MACLEAN: 17.
asked the Parliamentary Secretary to the Admiralty whether he is aware that Captain John
Ball joined the Royal Naval Air Service at the outbreak of the War in 1914, and in 1917 was transferred with the rest of the Royal Naval Air Service to the Royal Air Force and demobilised in May, 1919; that, through the mistake of some official, excess allowances were paid into his account amounting to £90 during the time that Captain Ball was on foreign service; that in 1923 the error was discovered and a claim made for the recovery of the sum when he was in Austria and unable to return or instruct solicitors; that the Admiralty got judgment by default and proceeded to make him bankrupt; and whether, in view of the service of this officer, the fact that the error was not his, and that in leaving the service he was given a clearance certificate showing he owed nothing, he will withdraw the claim and so enable the bankruptcy to be annulled?

Mr. DAVIDSON: I am aware that owing to the non-stoppage of the officer's allotment of naval pay on transfer to the Royal Air Force in 1918 pay to the amount of £190 was over-issued. The over-issue was due to the general conditions prevailing at the time. Officers were warned by general order that such overpayments were probable, that they should bring them to notice, and that acceptance of payments from two sources would be strictly dealt with. The overpayment was discovered in November, 1919 (not in 1923 as stated in the question), and the officer was thereupon requested to refund; he had returned from foreign service in July, 1918. No refund having been made by December, 1920, legal proceedings were taken. A letter of intention to proceed with action was served personally by the British Consulate in Vienna in July, 1922, and judgment was signed in default of appearance on 23rd January, 1923. As the officer failed to comply with the judgment, bankruptcy proceedings were instituted. The claim having been considered justifiable, I am not prepared to withdraw it. The clearance certificate was issued by the Air Ministry before the discovery of the overpayment, and, in any case, could not affect the question of any debts to naval funds.

Mr. MACLEAN: Is it not the case that the Deputy-Accountant-General of the Admiralty invited this officer to make an offer, and he did so, and sent a cheque for £150, which was received by the
Accountant-General, retained by him for several days, and then returned by him on the ground that the Admiralty wanted this officer to pay the full a-mount, plus the costs in the action?

Mr. DAVIDSON: I am not aware of that.

Mr. MACLEAN: 18.
asked the Parliamentary Secretary to the Admiralty the number of officers against whom claims were made by his Department for recovery of over payments of allowances during the War; and how many of those officers were made bankrupt through their inability to refund the amount of over payments?

Mr. DAVIDSON: I regret that it is impracticable to give the information asked for in the first part of the question. As regards the latter part, one officer has been made bankrupt for the reason stated.

Oral Answers to Questions — UNEMPLOYMENT.

ENEFIT DISALLOWED.

Colonel DAY: 19.
asked the Minister of Labour upon what grounds extended benefit, under the Unemployment Insurance Act, was refused Mr. D. Potts, of 7, Uxbridge Street, Southwark, S.E.I?

The MINISTER of LABOUR (Sir Arthur Steel-Maitland): This claim was disallowed by the committee on the ground that the claimant could not show a reasonable period of insurable work in the preceding two years.

Colonel DAY: Is the right hon. Gentleman aware that this claimant received a letter stating it was, in the Minister's opinion, not expedient to authorise this benefit, and can the right hon. Gentleman give the grounds for that statement?

Sir A. STEEL-MAITLAND: I cannot state that at this time, because if I remember aright, this disallowance took place in the autumn of last year, and after this length of time I am afraid I cannot give the precise reasons. After a period of six months the claimant has a right to have his claim examined again, and I understand the Department are arranging for it to be referred to the committee.

Colonel DAY: Will the right hon. Gentleman state why this claimant was advised to attend regularly at the local
Employment Exchange, in view of the fact that the claim was disallowed, and there was no work there for him?

Sir A. STEEL-MAITLAND: I do not accept that statement for a moment. The claim was disallowed, as far as my information goes, in September last year, and a six months' period is generally asked for in cases of this kind, and when it has expired the matter can again he gone into by the committee.

Colonel DAY: Is the right hon. Gentleman aware that I have here a letter from the Ministry of Labour, dated the 24th September, in which the claimant is advised to continue to attend at the local Employment Exchange in order to obtain employment?

Colonel DAY: 21.
asked the Minister of Labour if he will cause the claim for unemployment insurance benefit made by Mr. H. Margery, a single man, of 44, Peacock Street, Southwark, S.E., at the Borough Exchange, to be reviewed on the grounds that the official notice (pink form) which he has received disallows benefit on stated reasons, which reasons can only apply under existing Regulations to married women whose husbands are in employment, or to married men whose wives are in employment?

Sir A. STEEL-MAITLAND: I am sorry if a slip has been made in the ground of disallowance notified, but the disallowance must stand, the ground being that Mr. Margery is a single young man living with his family, who are in a position to support him.

TRAINEES (WALLSEND).

Mr. VIANT: 20.
asked the Minister of Labour whether he is aware that the trainees undergoing a course of training in painting at the Wallsend centre are being employed on the renovation of the exterior of a church in Park Road, Wall-send; and if, in view of the number of craftsmen who are out of employment in the area, he will state on what grounds these trainees are employed on work of a public character; and whether these trainees are loaned out to public contractors and on what terms?

Sir A. STEEL-MAITLAND: Some of the trainees at Wallsend have been engaged on a small amount of outside painting work at the Congregational
Church, Park Road, Wallsend. It has been found that the training is made more effective if trainees can be given some practical work. They are not loaned out to public contractors, but a limited number of small contracts, such as that mentioned in the question, have been taken by the training centre to give the trainees a little practical work.

Mr. VIANT: May we have the terms and conditions?

Sir A. STEEL-MAITLAND: I have not the terms and conditions, but if there be any point about which the hon. Member desires to have information, I will make inquiries.

GRANTS COMMITTEE (ADVANCES).

Sir FREDRIC WISE: 23.
asked the Minister of Labour the amount advanced under the Unemployment. Grants Committee, what percentage is non-revenue producing, and what percentage is revenue producing?

Sir A. STEEL-MAITLAND: I am not sure as to the precise information desired by my hon. Friend. In the period since the autumn of 1921 the total estimated cost of works approved for grant on the loan basis by the Committee was approximately £87,500,000, of which £49,000,000 was for non-revenue producing works, and £38,500,000 for revenue producing works. In respect of grants on the wages basis during the same period the corresponding amounts were £17,000,000, £5,000,000 and £12,000,000 respectively.

EMPLOYMENT EXCHANGE, ROCHDALE.

Mr. KELLY: 24.
asked the Minister of Labour whether steps are being taken to provide more suitable premises for the work of the Employment Exchange at Rochdale?

Sir A. STEEL-MAITLAND: A site has been secured and plans prepared for the new building. The work will be commenced as soon as possible, having regard to the other commitments for the current financial year.

Mr. KELLY: In view of the difficulty of people having to wait about for hours on end, will the right hon. Gentleman expedite the building of these new premises?

Sir A. STEEL-MAITLAND: It is a question of money—how much money there is, and how fast the work can be gone on with within the limits of expense. The only thing I can say in modification of that is that in so far as times are given for applicants to attend, if they will pay regard to those times, there would not be the same need to wait about as so often occurs.

Mr. KELLY: Is the right hon. Gentleman aware that all the circumstances are not met under the conditions such as he suggests, and people are kept there even with the conditions attached?

Sir A. STEEL-MAITLAND: I quite agree, and I want to get rid of that, but I think the waiting need not be as long as it is at the present time.

Commander WILLIAMS: Will the right hon. Gentleman give the approximate cost of the new building?

DOCK LABOUR, MANCHESTER SHIP CANAL.

Mr. G. HURST: 22.
asked the Minister of Labour whether he is aware that a band of dockers employed at the Salford Docks, styling themselves the union of transport workers, refuse to allow men who worked at the docks as volunteers during the general strike to remain there unless they pay £1 each to this union; and what security he will give these men against such victimisation?

Sir A. STEEL-MAITLAND: After the general strike, it was agreed between the Manchester Ship Canal Company and the Transport and General Workers' Union that additional casual labour should be engaged to clear off accumulations of work. It was subsequently agreed that from 75 to 100 of these men should be added to the port list of regular casuals to fill vacancies. I have no information to show that any of them had worked as volunteers during the strike, or that the local union officials have put any pressure on them to join the union. I understand that most of the local dock labour belongs to the union, the ordinary entrance fee to which is £1. I see no ground for my intervention.

Mr. HURST: Is the right hon. Gentleman aware that the loyalists who served during the strike have been forced to join this union as a condition of employment at the docks?

Mr. SEXTON: Is the right hon. Gentleman not aware that, as a matter of fact, these men never were dockers at all, and never worked at the docks in their lives before, and this has caused the victimisation of the men whose places they took? Why not let bygones be bygones?

Sir A. STEEL-MAITLAND: I shall be glad to receive any information of the kind suggested by my hon. Friend the Member for Moss Side (Mr. Hurst) or by the hon. Member for St. Helens (Mr. Sexton). I have not any information to substantiate either of the supplementary questions which have been put to me, and I have no information as to the volunteers who, it is alleged, have been made to join the union, nor have I any information that any members of the union were victimised as stated by the hon. Member for St. Helens.

Major COLFOX: Will the Government make it a condition that membership of any trade union shall not be a sine qua non for obtaining employment in this or any other trade?

Mr. SPEAKER: That does not arise on this question.

IRAQ (INLAND WATER TRANSPORT).

Lieut.-Commander KENWORTHY: 25.
asked the Secretary of State for Air how many persons are employed in the inland water transport in Iraq; how many of these are British or other Europeans; what is the annual cost, of this service; and by whom this cost is defrayed?

The SECRETARY of STATE for AIR (Sir Samuel Hoare): The answer to the first and second parts of the question is 81 British, 481 Indians and 113 Iraqis, total 675. As regards the third part, I would refer the hon. and gallant Member to the reply given to the hon. Member for Ilford (Sir F. Wise) on 28th June. As regards the last part of the question, the cost is repaid to Air Votes from the Vote for Middle Eastern Services.

Lieut.-Commander KENWORTHY: Is this being run at a profit?

Sir S. HOARE: It is difficult to say whether it is being run at a profit or not. It is being run mainly for the carriage of
Air Force supplies. In order to compare the cost of water transport and railway transport, I am making further inquiries.

KENSINGTON GARDENS.

Sir WILLIAM DAVISON: 26.
asked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, for what reason stacks of bricks are being placed on the grass not far from the roadway separating Kensington Gardens from Hyde Park, and not many yards from the Rima panel?

Captain HACKING (for The FIRST COMMISSIONER of WORKS): The bricks have been placed in their first position by the London County Council in connection with repairs which they are carrying out to the storm relief sewer, which runs under Hyde Park and Kensington Gardens.

Sir W. DAVISON: In order to avoid further questions, can the hon. and gallant Gentleman give a general assurance that no architectural erections on the lines of the Rima panel will be put up in any of the Royal Parks without public approval?

Captain HACKING: I hope these bricks will not be a temptation to my hon. Friend to use them for any purpose other than that for which they are intended.

MERCHANDISE MARKS BILL.

Mr. BOOTHBY: 27.
asked the President of the Board of Trade whether he will consider the possibility of introducing legislation to compel all butchers registering as such and selling imported mutton and beef to deliver this meat wrapped in paper indicating that it is imported?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir Burton Chadwick): The proposals of the Government respecting the marking of imported goods are embodied in the Merchandise Marks (Imported Goods) Bill now before Parliament. I do not propose to introduce any special legislation in regard to mutton and beef.

Mr. BOOTHBY: Is it not the fact, as stated by the Commission, that a great deal of the meat which is sold at the
present time as home-grown is in fact imported from abroad, and will he stop that?

Captain BRASS: Would the Parliamentary Secretary consider the advisability of having different coloured papers for the different kinds of meat from foreign countries.

Sir B. CHADWICK: There is a good deal of variety dealt with under the Merchandise Marks Bill as imported goods, and I think the answer to both supplementary questions is that it is generally considered that the terms of that Measure are sufficient to protect the interests of the public in this matter of imported meat.

Mr. BUCHANAN: Is the Parliamentary Secretary aware that certain butchers in the country are prepared voluntarily to carry out this work, but the Government action in increasing the price of paper has made it prohibitive?

SHEPHERD: 30.
asked the President of the Board of Trade whether his attention has been called in connection with the Merchandise Marks (Imported Goods) Bill, to the fact that any restrictions involving Customs delays will cause the rapid deterioration of consignments of soft fruits, will increase the percentage of waste, lower the quality, and add to the expense; and what steps he proposes to take to meet these difficulties?

Sir B. CHADWICK: Representations have reached me to this effect. It is the intention of the Government to await the Report of the Committee which is to be set up under the Bill on any application that may be referred to them, before deciding what course to pursue. In view however, of the experience which the Customs have had in dealing with importations of perishable goods bearing marks contravening the existing Merchandise Marks Acts, there is no reason to apprehend that any delay resulting from the detention of such goods under the projected legislation will be such as to involve deterioration.

Miss LAWRENCE: 32.
asked the President of the Board of Trade whether he has received representations from the National Federation of Fruit and Potato Traders' Association pointing out that any attempt to enforce the marking of produce before and after importation will
be detrimental to the interests of the British consumer, and objecting to being handed over to the jurisdiction of a Committee nominated by the Minister of Agriculture; and what reply he has returned?

Sir B. CHADWICK: I have received from the Federation a resolution to the effect indicated. I may remind the hon. Member that these questions have been fully discussed in Standing Committee.

EMPIRE TRADE (ARBITRATION AWARDS).

Mr. BOOTHBY: 28.
asked the President of the Board of Trade whether, in view of His Majesty's Government's desire to help Empire trade, he has taken any steps to encourage the reciprocal enforcement of arbitration awards throughout the Empire as recommended in a resolution of the Imperial Economic Conference of 1923?

The UNDER-SECRETARY of STATE for COLONIAL AFFAIRS (Mr. Ormsby-Gore): I have been asked to answer this question. Copies of the resolution referred to were forwarded to the Dominions and Australian States in March, 1924, and to the Colonies and Protectorates in July, 1924. Legislation establishing reciprocity with this country is now in force in most of the Australian States, in the territories under the administration of the Commonwealth of Australia, in New Zealand, in Newfoundland, in Southern Rhodesia, and in almost all the Colonies and Protectorates. Some progress has also been made in the establishment of reciprocal arrangements in this matter as between various Dominions and Colonies.

FORESTRY COMMISSION (REPORT).

Major Sir ARCHIBALD SINCLAIR: 33.
asked the hon. Member for Monmouth, as representing the Forestry Commissioners, when the Report of the. Forestry Commission for the year ending 30th September, 1925, will be published; and if he is in a position to state the reason for the delay in its publication?

Sir LEOLIN FORESTIER-WALKER (for The FORESTRY COMMISSIONERS): The Report of the Forestry Commissioners for the year ended
30th September last is in proof, and will be published this month. Publication was delayed by the general strike.

Sir A. SINCLAIR: Can we not have this Report very much earlier, seeing that it deals only with the year up to September, and, if we do not get it till May or June, we have not time to do any work on it during the Parliamentary Session?

Sir L. FORESTIER-WALKER: We usually have it in June, but, owing to the delay through the strike, we have not got it until this month. I hope, however, that it will be available earlier than May next year, though I cannot say for certain.

Oral Answers to Questions — COAL TRADE DISPUTE.

IMPORTED COAL.

Lieut.-Commander KENWORTHY: 34.
asked the Secretary for Mines the total imports of coal into Great Britain and Northern Ireland from the 1st July last to the nearest convenient date?

The SECRETARY for MINES (Colonel Lane Fox): Reports that I have received indicate that about 1,345,000 tons of imported coal arrived at British ports between 1st and 17th July. I have no information as to Northern Ireland.

Mr. HARTSHORN: Can the right hon. Gentleman give the price at which the coal has been purchased?

Colonel LANE FOX: I do not think I can, but, if the right hon. Gentleman likes to put down a question, I will see.

Sir F. WISE: Was it imported in British ships?

Colonel LANE FOX: I should require notice of that question.

Mr. W. THORNE: Is the right hon. Gentleman aware that American coal is costing £3 a ton in this country?

Mr. MACQUISTEN: Has the right hon. Gentleman any knowledge of the amount of oil that is now being used in place of coal on long-distance journeys?

TRAWIERS.

Captain BENN: 35.
asked the Secretary for Mines whether any part of the coal purchased by the Government is
available for the use of trawlers; if so, at what price; and whether his attention has been called to the fact that many trawlers are laid up for want of fuel at reasonable prices?

Colonel LANE FOX: The coal purchased by the Government is not at present available for trawlers, but they are arranging satisfactorily for their own supplies of foreign coal. With regard to the last part of the question, I am aware that the number of trawlers laid up is large, and this is no doubt, to some extent, due to the increased cost of fuel and the difficulty of obtaining it. But I am advised that another important cause is the decrease in the demand for fish, resulting from the diminished purchasing power of the nation due to unemployment consequent upon the coal stoppage.

Captain BENN: Has not the right hon. Gentleman power, under the Emergency Regulations and so forth, to supply coal at reasonable prices, and is he aware that at Granton alone 60 trawlers arc laid up because coal is costing £2 15s. per ton, whereas previously the price was 18s.?

Colonel LANE FOX: Yes, Sir; but the hon. and gallant Gentleman will remember that Government coal is primarily intended for the relief of small and essential undertakings which have not the particular advantages that trawlers have of being able to bunker abroad.

Mr. KIRKWOOD: Has it not been brought to the notice of the right hon. Gentleman that this coal is absolutely no use for the purpose for which it is being used—[Laughter]—and that it would not be here if it were not for the Fact that the Government are anxious to beat the miners?

Lieut.-Commander KENWORTHY: In the event of the coal stoppage continuing, will the right hon. Gentleman consider making coal available for trawler owners at a reasonable price from the Government imports?

Colonel LANE FOX: Yes, Sir; if the need is sufficient and if other undertakings have been supplied, then, of course, trawlers can be considered, but at the present moment only a coin-
paratively small amount of Government coal has arrived, and other needs are much more paramount.

Mr. KIRKWOOD: Can I have reply to my question?

Mr. SPEAKER: The hon. Member's question was in the nature of a speech or an argument.

Mr. KIRKWOOD: May I ask the right hon. Gentleman, then, if it is not the case that this coal which he is importing is not so good as British coal?

Colonel LANE FOX: There are many varieties of coal coming from abroad, and I do not know to what particular coal the hon. Gentleman refers.

Mr. KIRKWOOD: Generally speaking.

Colonel LANE FOX: A great deal of the coal that is coining is extremely good.

Mr. PALING: is it the fact that many steamers and railway trains are taking nearly double the usual time for their journeys owing to the bad quality of the coal?

Mr. SPEAKER: That does not arise out of this question, which is about trawlers.

LONDON TELEPHONE DIRECTORY (DR. A. E. W. IDRIS).

Mr. MacKENZIE LIVINGSTONE: 37.
asked the Postmaster-General whether he is aware that Dr. A. E. W. Idris, practising as an amesthetist in London, has suffered loss in consequence of his name having been negligently omitted from the London Telephone Directory for October, 1925; and what steps he proposes to take to compensate this gentleman?

The ASSISTANT POSTMASTER-GENERAL (Viscount Wolmer): I am aware that through an unfortunate error, which I greatly regret, Mrs. Idris's name was inserted in the London Telephone Directory for October, 1925, instead of that of Dr. Idris. One of the conditions relating to entries in the Telephone Directory is that the subscriber shall have no claim against the Post Office in respect of any omission or error, and, in the circumstances, I am not able to grant compensation to Dr. Idris. I have, however,
offered to bear the cost he had incurred
in notifying the error to a number of his clients, but this has been refused by Dr. Idris.

Oral Answers to Questions — TRANSPORT.

HIGHLAND RAILWAY COMPANY(LITIGATION).

Mr. JOHNSTON: 39.
asked the Lord Advocate how many senior counsel have been instructed by the Government in a litigation at present being engaged in with the Highland Railway Company?

The MINISTER of TRANSPORT (Colonel Ashley): I have been asked to reply to this question. In the litigation to which the hon. Member is understood to refer, counsel are being instructed by the railway company concerned, who are the appellants, and with whom it rests to make such arrangements as they think proper for the conduct of the case.

Mr. JOHNSTON: Are not the Government briefing counsel in this case?

Colonel ASHLEY: No, Sir; the railway company are briefing counsel.

LONDON, TILBURY AND SOUT REND RAILWAY.

Miss LAWRENCE: 40.
asked the Minister of Transport whether he is aware that, while a full-time service of trains is running on the London, Tilbury and Southend Railway, the staff on the permanent way are now only employed for three days a week; that complaints have been received from drivers and stationmasters as to the condition of the track, particularly as to keys having fallen out of the chairs of the rails; and whether he will inquire into this matter and take all necessary steps for the safeguarding of the public?

Colonel ASHLEY: I have no information on these matters, and am not aware that the track of the railway mentioned is in an unsatisfactory condition. If, however, I am furnished with specific details of the complaints referred to in the latter part of the question, I will communicate with the railway company.

Miss LAWRENCE: Is the right hon. Gentleman aware that on the 15th a train
was derailed at Romford, that on the 16th there was another derailment at the northern siding, and that on the 17th there were two more at the same siding?

Colonel ASHLEY: If the hon. Member will kindly send me those details in writing, I will at once investigate them.

SHOP HOURS ACT (ICE-CREAM,CHOCOLATES AND CIGARETTES).

Colonel WOODCOCK: 41.
asked the Secretary of State for the Home Department whether he proposes to bring in some form of legislation to cancel the present laws which limit the hours during which ice-creams, chocolates and cigarettes may be purchased; and whether he is aware that such concessions would be of convenience to the public generally?

Sir HARRY BRITTAIN: 42.
asked the Home Secretary whether, having regard to the comfort and convenience of holiday makers in the immediate future, he can see his way to take steps to make legal the purchase of cigarettes after 8 p.m. and ice-cream later than 9.30 p.m. and bring to an end restrictions imposed on such sales during the period of the War?

The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): I am fully alive to the importance of this question as affecting both the convenience of customers and the interests of shopkeepers and shop assistants, but any legislation to amend the existing Acts would, I fear, be highly controversial, and I can hold out no hope of legislation this Session.

Colonel WOODCOCK: Is my right hon. Friend aware of the intense feeling that exists throughout the, country in reference to this matter, and will he reconsider the opinion he has given us to-day and bring in some legislation?

Mr. RADFORD: Will he also take into account the feeling throughout the country that shop assistants' hours are quite long enough?

Several hon. Members rose—

Mr. SPEAKER: Hon. Members had better discuss that amongst themselves.

PORTUGAL (DEBT TO GREAT BRITAIN).

Sir F. WISE: 43.
asked the Chancellor of the Exchequer the amount Portugal owes Great Britain and if a delegation has left Lisbon to negotiate the terms of a settlement?

The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): The total amount of the Portuguese War Debt to Great Britain is now, approximately, £23,000,000. I understand that a Commission to negotiate terms of settlement has recently arrived in London, but the negotiations have not yet started.

QUESTIONS TO MINISTERS.

Mr. MACQUISTEN: I was asked by the hon. Member for Acton (Sir H. Brittain) to ask Question 42. I wish to put a supplementary to it?

Mr. SPEAKER: That could not come till the second round.

Mr. MACQUISTEN: It has been answered. I therefore, submit—

Mr. SPEAKER: I have passed on to the next question on the Paper.

Mr. MACQUISTEN: On a point of Order. I was commissioned to ask the question. Two questions were answered together, and I shall not be entitled on their second calling to ask my supplementary question. I have been deprived of that opportunity.

Mr. SPEAKER: We cannot now go back.

RHINE ARMY OF OCCUPATION (COST).

Sir F. WISE: 36.
asked the Secretary Of State for War the cost of the Army of Occupation from 1st April to 30th June, 1926; the cost for the same period of 1925; and the numbers of troops for the same date in 1925 and 1926?

The SECRETARY of STATE for WAR (Sir Laming Worthington-Evans): I regret that figures of actual expenditure for the periods in question are not available. For the full financial year 1925–26 the estimated expenditure was £2,089,000, and for the current year
£1,854,700. The approximate average number of officers and other ranks during April-June, 1925, was 8,900, and for the same period of 1926 was 8,000.

Sir F. WISE: Do the Dominions pay towards this amount?

Sir L. WORTHINGTON-EVANS: No. There is an adjustment out of the German Reparation payments. In that sense the Dominions contribute because they are among the ultimate beneficiaries of the receipts from reparations.

Sir F. WISE: Does the right hon. Gentleman think the Dominions should pay towards this amount?

Sir L. WORTHINGTON - EVANS: That is not a matter upon which it is desirable that I should express an opinion at this moment.

CINEMA FILMS (BLOCK BOOKING).

Mr. MACQUISTEN (for Sir H. BRITTAIN): 29.
asked the President of the Board of Trade whether, with reference to the question of the blind booking of films and in view of the importance of this subject to the Empire as a whole, he will consider the desirability of introducing the necessary legislation in time to be discussed at the meeting of the Imperial Conference?

Sir B. CHADWICK: As my hon. Friend is aware, the President of the Board of Trade is now awaiting a report from the cinema industry on this subject. In any event I fear it would not be possible to prepare and introduce legislation before the adjournment for the Summer Recess.

Mr. MACQUISTEN: Would it not be possible to get this matter accelerated before the Imperial Conference? The importation of these block film bookings is very injurious.

Sir B. CHADWICK: The point in the question is that there should be legislation. There is no necessity for legislation in order to bring the matter before the Imperial Conference, and in fact it is already on the agenda of the Imperial Conference.

Colonel DAY: Would it not be very much better to let the cinema industry carry out its business in its own way?

Mr. MACQUISTEN: All these restrictions on block booking are in restraint of trade.

HON. MEMBERS: Speech!

KENYA (COMPULSORY MILITARY TRAINING).

Mr. RENNIE SMITH: 44.
asked the Secretary of State for the Colonies how much time per year the European colonists of Kenya will require to spend in compulsory military training?

Mr. ORMSBY-GORE: I would refer the hon. Member to the reply given to a similar question by the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) on 15th July.

Mr. SMITH: Does the hon. Gentleman think the exclusive concentration of military power in the hands of a small minority of Europeans is calculated to improve our relations with Asiaties on the one hand and with the natives on the other, and why is it, after years of agitation that he has yielded to the principle of compulsion?

Mr. ORMSBY-GORE: As I said in my answer the other day, there is no question of concentration of military power. This is a Reserve Defence Force which may never be called out, but it is the wish of the people there that, as they have bad a voluntary Defence Force, they would like it to be compulsory. My right hon. Friend has agreed to that, it being the unanimous wish of all the elected members of the Legislature.

Mr. MACLEAN: If all the people want training, why should it be compulsory? If they all want it, surely they will all volunteer.

Mr. ORMSBY-GORE: I said all the elected representatives.

Mr. SMITH: What does the hon. Gentleman mean when he uses the word "people"? Does that include Asiatics and natives?

Mr. ORMSBY-GORE: No; this applies purely to Europeans.

IMPERIAL CONFERENCE (GREAT BRITAIN AND RUSSIA).

Commander FANSHAWE: asked the Prime Minister if it is the intention of His Majesty's Government to raise the question of the relations between the British Empire and Russia at the forthcoming Imperial Conference?

The PRIME MINISTER (Mr. Baldwin): This question would naturally fall under review in connection with the general survey of our foreign relations.

IRISH FREE STATE (BRITISH PATENT RIGHTS).

Sir W. DAVISON: 46.
asked the Secretary of State for Dominion Affairs whether his attention has been called to the recent decision in the High Court of the Irish Free State in Dublin, which lays down that British patent rights are no longer valid in the Irish Free State; and whether, in view of the concern which has been occasioned to the holders of British patents by the above decision, he will state what action the British Government are taking in the matter?

Mr. ORMSBY-GORE: His Majesty's Government have been in communication with the Government of the Irish Free State in this matter, and they are informed by them that notice of appeal against the judgment in question has been entered, but that it is doubtful whether it will be possible for the appeal to be heard before the autumn. His Majesty's Government are further informed that the Minister for Commerce and Industry introduced yesterday into the Dail a Bill declaring the validity in the Irish Free State of all patents registered in the Patent Office, London, prior to 7th December, 1921.

BUSINESS OF THE HOUSE.

Mr. CLYNES: What statement can the Prime Minister make on the business to be taken to-morrow and on Friday?

The PRIME MINISTER: To-morrow, instead of the business announced, we shall take Committee of Supply, Board of Education Vote.
Friday: The Report stage of the Mining Industry Bill.
If time permit on either of these days, we shall take other small Orders on the Paper.

Mr. LAWSON: Does the right hon. Gentleman expect to get the Mining Industry Bill through Report stage on Friday?

The PRIME MINISTER: I did not mention any expectation. I said we

should take it. I do not know how far we shall get.

Motion made, and Question put,
That the Proceedings on the Expiring Laws Continuance Bill be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."— [The Prime Minister.]

The House divided: Ayes, 237; Noes, 102.

Division No. 382.]
AYES.
[3.28 p.m.


Acland-Troyte, Lieut-Colonel
Dixey, A. C.
Lloyd, Cyril E. (Dudley)


Agg-Gardner, Rt. Hon. Sir James T.
Dixon, Captain Rt. Hon. Herbert
Locker-Lampson, G. (Wood Green)


Albory, Irving James
Drews, C.
Loder, J. de V.


Allen, J. Sandeman (L'pool, W.Derby)
Edmondson, Major A. J.
Lowe, Sir Francis William


Applin, Colonel R. V. K.
Edwards, J. Hugh (Accrington)
Luce, Maj.-Gen. Sir Richard Harman


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Elliot, Major Walter E.
Lumley, L. R.


Astor, Maj. Hn. John J. [Kent,Dover)
Ellis, R. G.
Lynn, Sir R. J.


Baldwin, Rt. Hon. Stanley
Elveden, Viscount
MacAndrew, Major Charles Glen


Balfour, George (Hampstead)
England, Colonel A.
Macdonald, Capt. P. D. (I. of W.)


Bainiel, Lord
Erskine, Lord (Somerset, Weston-s.-M.)
McDonnell, Colonel Hon. Angus


Barclay-Harvey. C. M.
Erskine, James Malcolm Montelth
Maclntyrs, Ian


Bellairs. Commander Carlyon W.
Everard, W. Lindsay
Macnaghten, Hon. Sir Malcolm


Benn, Sir A. S. (Plymouth, Drake)
Fairfax, Captain J. G.
McNeill, Rt. Hon. Ronald John


Bennett, A. J.
Falie, Sir Bertram G.
Macquisten, F. A.


Berry, Sir George
Fielden, E. B.
Maitiand, Sir Arthur D. Steel-


Bethel, A.
Forestier-Walker, Sir L.
Malone, Major P. B,


Blundell, F. N.
Forrest, W.
Manningham-Buller, Sir Mervyn


Boothby, R. J. G.
Foxcroft, Captain C. T.
Margesson, Captain D.


Bourne, Captain Robert Croft
Fraser, Captain Ian
Marriott, Sir J. A. R.


Bowyer, Capt. G. E. W.
Fremantle, Lieut.-Colonel Francis E.
Meyer, Sir Frank


Boyd-Carpenter, Major Sir A. B.
Ganzoni, Sir John
Mitchell, S. (Lanark, Lanark)


Brass, Captain W.
Gates, Percy
Mitchell, W. Foot (Saffron Walden)


Bridgeman, Rt. Hon. William Clive
Gilmour, Lt.-Col. Rt. Hon. Sir John
Moore, Lieut.-Colonel T. C. R. (Ayr)


Briggs, J. Harold
Glyn, Major R. G. C.
Moore-Brabazon, Lieut.-Col. J. T. C.


Brocklebank, C. E. R.
Goff, Sir Park
Morrison, H. (Wilts, Salisbury)


Brooke, Brigadler-Generat C. R. I.
Gower, Sir Robert
Morrison-Bell, Sir Arthur Clive


Broun-Lindsay, Major H.
Grant, Sir J. A.
Murchlson, C. K.


Brown. Col. D. C. {N'th'I'd., Hexham)
Guinness, Rt. Hon. Walter E.
Nelson, Sir Frank


Brown, Brig.-Gen. H.C.(Berks. Newb'y)
Hacking, Captain Douglas H.
Newton, Sir D. G. C. (Cambridge)


Buckingham, Sir H.
Hall, Capt. W. D'A. (Brecon & Rad.)
Nicholson, O. (Westminster)


Bullock, Captain M.
Hannon, Patrick Joseph Henry
Nicholson, Col. Rt.Hon.W.G.(Ptrst'Id.)


Burman, J. B.
Hartington, Marquess of
Nield, Rt. Hon. Sir Herbert


Burton, Colonel H. W
Harvey, G. (Lambeth, Kennington)
Nuttall, Ellis


Butler, Sir Geoffrey
Harvey, Major S. E. (Devon, Totnes)
O'Neill, Major Rt. Hon. Hugh


Cadogan, Major Hon. Edward
Henderson,Capt.R.R. (Oxf'd, Henley)
Ormsby-Gore, Hon. William


Campbell, E. T.
Henderson, Lieut.-Col. V. L. (Bootle)
Penny, Frederick George


Cautley, Sir Henry S
Heneage. Lieut.-Col. Arthur P.
Perkins, Colonel E. K.


Cazalet, Captain Victor A.
Hennesty, Major J. R. G.
Perring, Sir William George


Chadwick, Sir Robert Burton
Herbert, S. (York, N. R., Scar. & Wh'by)
Peto, Basil E. (Devon, Barnstaple)


Chamberlain, Rt.Hn.Sir J.A (Blrm.,W.)
Hilton, Cecil
Pielou, D. P.


Chamberlain, Rt. Hon. N, (Ladywood)
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Pitcher, G.


Charterls, Brigadier-General J.
Holt, Captain H. P.
Pownall, Lieut.-Colonel Sir Assheton


Christie, J. A.
Hope, Sir Harry (Forfar)
Preston, William


Churchman, Sir Arthur C.
Hopkins, J. W. W.
Radford, E. A.


Clayton, G. C.
Hopkinson. Sir A. (Eng. Universities)
Raine. W,


Cochrane, Commander Hon. A. D.
Hopkinson, A. (Lancaster, Mossley)
Ramsden, E.


Cohen, Major J. Brunei
Horlick, Lieut.-Colonel J. N.
Rawson, Sir Cooper


Colfox, Major Wm. Phillips
Howard, Captain Hon. Donald
Remnant, Sir James


Conway, Sir W. Martin
Hudson, Capt. A. U. M. (Hackney, N.)
Rhys, Hon. C. A. U.


Cooper, A. Duff
Huntingfield, Lord
Richardson, Sir P. W. (Sur'y, Ch'te'y)


Cope. Major William
Hurd, Percy A.
Roberts, Sir Samuel (Hereford)


Couper, J. B.
Hurst, Gerald B.
Robinson, Sir T. (Lanes, Stretford)


Cowan, Sir Wm. Henry (Islington, N.)
Illffe, Sir Edward M.
Ropner, Major L.


Craig, Ernest (Chester, Crewe)
Jackson, Sir H. (Wandsworth, Cen'l)
Sandeman, A. Stewart


Craik, Rt. Hon. Sir Henry
Jacob, A. E.
Sanders, Sir Robert A.


Croft, Brigadier-General Sir H.
James, Lieut.-Colonel Hon. Cuthbert
Sanderson, Sir Frank


Crookshank, Cpt.H (Lindsey,Gainsbro)
Jones, G. W. H. (Stoke Newington)
Sandon, Lord


Cunliffe, Sir Herbert
Joynson-Hicks, Rt. Hon. Sir William
Sassoon, Sir Philip Albert Gustave D.


Curzon, Captain Viscount
Kennedy, A. R. (Preston)
Savery, S. S.


Davidson, J.(Hertf'd, Hemel Hempst'd)
Kidd. J. (Linlithgow)
Shaw, Capt. Walter (Wilts, Westb'y)


Davies, Dr. Vernon
King, Captain Henry Douglas
Sheffield, Sir Berkeley


Davies, Maj. Geo. F. (Somerset, Yeovil)
Kinloch-Cooke, Sir Clement
Simms, Dr. John M. (Co. Down)


Davies, Sir Thomas (Cirencester)
Knox, Sir Alfred
Smith, R. W. (Aberd'n & Kinc'dine, C.)


Davison, Sir W. H. (Kensington, S.)
Lamb, J. Q.
Smithers, Waldron


Dawson, Sir Philip
Lane Fox, Col. Rt. Hon. George R.
Sprot, Sir Alexander


Dean, Arthur Wellesley
Lister, Cunliffe-, Rt. Hon. Sir Philip
Stanley, Lord (Fylde)


Stott, Lieut.-Colonel W. H.
Tinne, J. A.
Williams, Com. C. (Devon, Torquay)


Streatfelld, Captain S. R.
Tryon, Rt. Hon. George Clement
Williams, Herbert G. (Reading)


Strickland, Sir Gerald
Turton, Sir Edmund Russborough
Windsor-Clive, Lieut.-Colonel George


Stuart, Criehton-, Lord C.
Waddington, B
Winterton, Rt. Hon. Earl


Stuart, Hon. J. (Moray and Nairn)
Wallace, Captain D. E.
Wise, Sir Fredric


Styles, Captain H. Walter
Ward, Lt.-Col. A.L.(Kingston-on-Hull)
Womersley, W. J.


Sueter, Rear-Admiral Murray Fraser
Warner, Brigadier-General W. W.
Wood, Sir H. K. (Woolwich, West)


Sugden, Sir Wilfrid
Warrender, Sir Victor
Wood, Sir S. Hill- (High Peak)


Sykes, Major-Gen. Sir Frederick H.
Waterhouse, Captain Charles
Woodcock, Colonel H. C.


Tasker, Major R. Inigo
Watson, Rt. Hon. W. (Carlisle)
Worthington Evans, Rt. Hon. Sir L.


Templeton, W. P.
Watts, Dr. T.
Wragg, Herbert


Thom, Lt.-Col. J. G. (Dumbarton)
Wells, S. R.



Thompson, Luke (Sunderland)
White, Lieut.-Col. Sir G. Dairymple
TELLERS FOR THE AYES.—


Thomson, F. C. (Aberdeen, South)
Williams, A. M. (Cornwall, Northern)
Colonel Gibbs and Major Sir Harry Barnston.


NOES.


Adamson, Rt. Hon. W. (Fife, West)
Hall, G. H. (Merthyr Tydvil)
Purcell, A. A.


Barker, G. (Honmouth, Abertillery)
Hamilton, Sir R. (Orkney & Shetland)
Runclman, Rt. Hon. Walter


Barnes, A.
Hardle, George D.
Saklatvala, Shapurji


Barr, J.
Harney, E. A.
Scrymgeour, E.


Beckett, John (Gateshead)
Hartshorn, Rt. Hon. Vernon
Scurr, John


Bonn, Captain Wedgwood (Leith)
Henderson, Rt. Hon. A. (Burnley)
Sexton, James


Broad, F. A.
Hirst, G. H.
Shaw, Rt. Hon. Thomas (Preston)


Brown, James (Ayr and Bute)
Hirst, W. (Bradford, South)
Shepherd, Arthur Lewis


Buchanan, G.
Hore-Belisha, Leslie
Short, Alfred (Wednesbury)


Cape, Thomas
Johnston, Thomas (Dundee)
Sinclair, Major Sir A. (Calthness)


Charleton, H. C.
Jones, Henry Haydn (Merioneth)
Smith, H. B. Lees- (Keighley)


Clowes, S.
Jones, Morgan (Caerphilly)
Smith, Rennie (Penistone)


Clynes, Rt. Hon. John R.
Jones, T. I. Mardy (Pontypridd)
Snell, Harry


Collins, Sir Godfrey (Greenock)
Kelly, W. T.
Snowden, Rt. Hon. Philip


Compton, Joseph
Kennedy, T.
Sutton. J. E.


Cowan, D. M. (Scottish Universities)
Kenworthy, Lt.-Com. Hon. Joseph M.
Thomas, Rt. Hon. James H. (Derby)


Dalton. Hugh
Kenyon, Barnet
Thorne, W. (West Ham, Plaistow)


Davies, Evan (Ebbw Vale)
Kirkwood, D.
Thurtle, E.


Davies, Rhys John (Westhoughton)
Lawrence, Susan
Tinker, John Joseph


Davison, J. E. (Smethwick)
Lawson, John James
Townend, A. E.


Day, Colonel Harry
Lee, F.
Varley, Frank B.


Dennison, R.
Livingstone, A. M.
Viant, S. P.


Duncan, C.
Lowth, T.
Walsh, Rt. Hon. Stephen


Dunnico, H.
Lunn, William
Watson, W. M. (Dunfermilne)


Fenby, T. D.
MacDonald, Rt. Hon. J. R. (Aberavon)
Watts-Morgan, Lt.-Col. D. (Rhondda)


Gardner, J. P.
Maclean, Neil (Glasgow, Govan)
Webb, Rt. Hon. Sidney


Gillett, George M.
Morris, R. H.
Wedgwood, Rt. Hon. Josiah


Gosling, Harry
Morrison, R. C. (Tottenham, N.)
Westwood. J.


Graham, D. M. (Lanark, Hamilton)
Murnin, H.
Wiggins, William Martin


Greenall, T.
Naylor, T. E.
Williams, Dr. J. H. (Lianelly)


Grenfell, D. R. (Glamorgan)
Oliver, George Harold
Wililame, T. (York, Don Valley)


Griffiths, T. (Monmouth, Pontypool)
Owen, Major G.
Wright, W.


Groves, T.
Paling. W.



Grundy, T. W.
Parkinson, John Allen (Wigan)
TELLERS FOR THE NOES.—


Hall, F. (York, W. R., Normanton)
Pethick-Lawrence, F. W.
Mr. Charles Edwards and Mr. Hayes.

AIR EXPENDITURE, 1924–25.

Resolved, That this House will, Tomorrow, resolve itself into a Committee to consider the surpluses and deficits upon Air Grants for 1924–25, and the application of surpluses to meet Expenditure not provided for in the Grants for that year.—[Colonel Gibbs.]

Ordered, That the Appropriation Account for Air Services, which was presented upon the 15th March last, be referred to the Committee.—[Colonel Gibbs.]

JUDICIAL PROCEEDINGS (REGULATION OF REPORTS) BILL.

Reported, with Amendments, from Standing Committee A.

Report to lie upon the Table, and to he printed.

Minutes of the Proceedings of the Standing Committee to be printed.

Bill, as amended (in the Standing Committee), to be taken into consideration upon Monday next, and to be printed. [Bill 165.]

MESSAGE FROM THE LORDS.

That they have agreed to,

Amendments to,

Land Drainage Bill [Lords],

Kidderminster and Stourport Tramways Bill [Lords],without Amendment.

INSURANCE BROKERS AND AGENTS (REGISTRATION) BILL,

"to provide for the registration of insurance brokers and agents; and for purposes incidental thereto," presented by Mr. MORRIS; supported by Mr. Rhys Davies, Mr. MacKenzie Livingstone, Mr. Fenby, Mr. Briant, and Mr. Remer; to be read a Second time upon Monday next, and to be printed. [Bill 166.]

BILLS REPORTED.

Ministry of Health Provisional Orders Confirmation (No. 6) Bill [Lords],

Reported, with Amendments [Provisional Orders confirmed]; Report to lie upon the Table.

Bill, as amended, to be considered To-morrow.

Ministry of Health Provisional Orders Confirmation (No. 7) Bill [Lords],

Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.

Bill to be read the Third time Tomorrow.

Ministry of Health Provisional Orders Confirmation (No. 8) Bill [Lords],

Reported without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.

Bill to be read the Third time Tomorrow.

Ministry of Health Provisional Orders Confirmation (No. 9) Bill [Lords],

Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.

Bill to be read the Third time To-morrow.

Ministry of Health Provisional Orders Confirmation (No. 10) Bill [Lords]

Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.

Bill to be read the Third time To-morrow.

Ministry of Health Provisional Order Confirmation (Ashton-under-Lyne Extension) Bill [Lords],

Reported, without Amendment [Provisional Order Confirmed]; Report to lie upon the Table.

Bill to be read the Third time Tomorrow.

Ministry of Health Provisional Order Confirmation (Ealing Extension) Bill [Lords],

Reported, without Amendment [Provisional Order Confirmed]; Report to lie upon the Table.

Bill to be read the Third time Tomorrow.

Worcester Corporation Bill [Lords],

Berwick-upon-Tweed Corporation (Freemen) Bill [Lords],

Manchester Ship Canal (General Powers) Bill [Lords],

Reported, with Amendments; Reports to lie upon the Table, and to be printed.

Orders of the Day — FINANCE BILL.

Order for Third Reading read.

Motion made, and Question proposed,
That the Bill be now read the Third time.

Mr. DALTON: I beg to move, to leave out the word "now," and, at the end of the Question, to add the words "upon this day three months."
I move this Amendment because I believe this Bill to be a bad Bill, following the bad tradition, of the Finance Bills of these post-War years, broken only in 1924, when my right hon. Friend the Member far Colne Valley (Mr. Snowden) was in charge of the finances of this country. We have heard a. good deal lately about French finances. There is one thing which we might with advantage learn from the French; they know how to get rid of unsuccessful Finance Ministers. We, on the other hand, are very tolerant, patient and long-suffering in this respect. The Chancellor of the Exchequer last year introduced a Finance Bill which was full of glamour and sensation. This year he has gone as near to a humdrum Budget as it is in his temperament to go. There is little glamour in this Finance Bill, in spite of the Betting Duty. Apart from that feature, it would be true to say that it is not only bad in principle but dull in detail. It is not unnatural that the Chancellor of the Exchequer this year should be singing in rather a minor key, because the great hopes of further reductions in taxation that were held out last year, which were to be secured from substantial economies in supply services, have not matured, and the hopes of further reductions of taxation have come to nought. In spite of concentrated economy campaigns against the social services, more particularly education and health, the Chancellor of the Exchequer has been unable to produce any considerable reduction in expenditure, and on the basis of existing taxation was landed with a prospective deficit of £8,000,000—a prospective revenue of £805,000,000 against an expenditure of £813,000,000. Therefore it is not unnatural that he should sing this year in a minor key.
When we turn to the balance sheet, we find that it is still dominated, as it has been since the War, by two factors—armaments and debt. These two forms of unproductive expenditure are responsible between them for more than 50 per cent. of the total expenditure. The total expenditure is £821,000,000, and subtracting £55,000,000 for Post Office expenditure (which is more than covered by a revenue of £59,000,000) we arrive at £766,000,000 as the net expenditure, of which £304,000,000 is for debt interest and £117,000,000 for armaments, a total of £421,000,000 out of 766,000,000 devoted to armaments and debt interest on loans, or more than 53 per cent. of the total and about 1os. 7d. in the £. If you add to that the Sinking Fund of £60,000,000, and war pensions £64,000,000—I do not grudge a single penny under these two heads—you arrive at a total of £545,000,000 out of £766,000,000, which may accurately be described as the combined cost of war in the past and preparation for war in the future. The balance left over for truly productive expenditure in the proper sense is very meagre. Further, it is apposite in this connection to note that the Income Tax and the Super-tax, at the low levels to which they have been reduced as a result of past Budgets, bring in only £320,000,000, which is not enough to cover debt charges, not enough to pay for the upkeep of our immense financial cenotaph represented by this £7,000,000,000 War Debt still outstanding.
Before the War the Income Tax and Super-tax yield covered the debt charges more than twice over, and the alteration in the ratio brought about since the War is the measure of the financial degradation at which we have arrived, the end of which we have not yet reached. It is against the burden of armaments and debt charges that an economy campaign has to be directed, rather than against the educational opportunities of the children and the development of the health, housing and other social services. But the prospect of relief given to us in the policy of His Majesty's Government under the heads of armaments and interest on the Debt are very small indeed. Although we are pledged to disarmament by the Treaty of Versailles, we are told that it may take several years, yet before we can hope to find a plan through
the League of Nations. Meanwhile, we are pledged to a great expansion of the Air Force to 18 times its strength in 1922. We are also pledged to a great increase in expenditure in respect of Singapore and in other directions. That expenditure is more popular with hon. Members opposite—[HON. MEMBERS: "Hear, hear!"]—I hope they will cheer after I have finished my sentence—it is more popular with hon. Members opposite than expenditure on education or on health services. I think hon. Members opposite cheered me somewhat prematurely.

Major Sir BERTRAM FALLE: You cannot have the one without the other!

Mr. DALTON: That is a matter of argument, but while this expenditure is viewed with great enthusiasm by hon. Members opposite we do not find them on our side when we are fighting the battle for expenditure on social services in order to build up the physical and mental qualities of the people. If I may turn to the French Debt negotiations in this connection, it appears to me that all the concessions of the Chancellor of the Exchequer to the French in respect of their debt, which means, of course, a future diminution in our receipts from that source, would have been well purchased and worth while making if they had formed the basis, or part of the basis for negotiations, including an Anglo-French agreement for disarmament, more particularly in the air. As far as I know, the Chancellor of the Exchequer made no attempt to link together debt and disarmament in these negotiations. The result is that we have made enormous concessions to the French, to be paid for by our own taxpayers in the future, and we have no quid pro quo in respect of any undertaking to check this suicidal competition in Air Forces that is proceeding between ourselves and out French Allies. We are drifting, with the approbation of many hon. Members opposite, to a more and more extensive preparation for war, which will be accelerated and rendered more likely by the policy now being pursued in common by the Allies in the late War. We are drifting, equally helplessly, with regard to the interest charges on the debt. We are still paying nearly £100,000,000 a day in interest alone upon the War Debt. The only means by which that can be reduced,
short of repudiation, is by a repayment of the debt, or by conversion to lower rates of interest. These two policies are complementary one to the other. The faster you repay the more you strengthen national credit, and the more economical conversion operations become.
It is partly because we are repaying debt so slowly that the prospects of conversion are so bleak. That they are bleak cannot be denied. The Chancellor of the Exchequer has lived to see British credit standing so low that within the next few years we are likely to see conversion operations increasing rather than reducing the burden of the debt charge. The Chancellor of the Exchequer is aware, he has told us in several speeches, of the large maturities which are impending; indeed, he has made it one of the excuses for not carrying out the recommendation of the Royal Commission on the Coalmining Industry with regard to the nationalisation of mining royalties. One reason why the Government are not willing to carry out the Report of the Coal, Commission is because they say that it would damage national credit to issue an additional amount of gilt-edged securities, although they are backed by the coal resources of the country, a large and tangible asset such as we have not got to put against our War Debt. In the next year or two, in 1927–28, we have maturing £63,000,000 of 3½ per cent. War Loan. It is perfectly clear that at the present low level of national credit, conversion will have to be carried out at an increased cost rather than a reduced cost to the taxpayer. We shall not be able to borrow at the low rate of interest of 3½ per cent, in order to replace this maturing 3½ per cent. liability. Similarly, in the same year, we have £80,000,000 maturing of 4 Per Cent, National War Bonds. We cannot now-borrow at 4 per cent.; the rate is nearer 5 per cent. Under both these heads, and certain others which might be mentioned. conversion operations, instead of being a cause of relief, will be a cause of added burdens to the taxpayers of the country. The prospects of relief from conversion, are, therefore, very meagre.
When we turn from conversion to re-, payment, we find the enormous total which I have mentioned, of £6,500,000,000 Internal Debt, and £1,100,000,000 of
External Debt, or a total of £7,600,000,000.Wehear a great
deal about the reductions of taxation that have been made in the past year or two being necessary and beneficial in the interests of trade, industry, and investment; but I think it is still true that the safest investment of all is the repayment of one's own debts, whether that principle be applied to individual economy or the economy of a great nation. I have no doubt at all that a given sum of money applied to Debt reduction produces far more beneficial results than the same sum of money applied to the reduction of the taxation of wealthy people, who spend a large part, not in helping trade or industry, but in luxury and extravagance and in an unduly distended standard of life.
My own suggestion of policy is that we should fix a term within which we should aim at the redemption of the whole of this Internal Debt. That does not introduce a new principle. When the present Prime Minister funded the debt to the United States, the term of 62 years was agreed upon. The Chancellor of the Exchequer or some Member of the Government will be asking this House later to assent to a loan to Palestine and the East African Dependencies. I find from the explanatory Memorandum that that loan will have to be repaid in 40 years, even although it will have behind it the solid capital assets of railways, roads and other public works. Therefore, there is nothing new in principle in proposing that we should fix a term within which the whole of the debt should be repaid. There may be dispute as to how long the term should be. I would like to see it short enough to give a prospect to those who are now in middle age of seeing the whole of this debt cleared off before they die. Evidence was given before the Colwyn Committee on debt and taxation, not by a member of the Labour party but by a highly respectable professor of political economy, whose evidence, based on a simple arithmetical calculation, was to the effect that if we raised the Sinking Fund to £100,000,000 a year, and made it fully cumulative, the whole debt could be paid off in just over 30 years. That is a very hopeful calculation. Even if we do not take quite so short a period,
that calculation alone proves that it is perfectly possible to secure the redemption of the whole of this debt within a comparatively short time, without placing any undue burden of additional taxation upon the people of this country.
The Chancellor of the Exchequer made an after-dinner speech last Wednesday at the Mansion House. It has already been referred to in terms of admiration more than once. I was greatly encouraged when I read the speech. It was full of admirable financial precepts, which could not, indeed, have been better had they been designed to provide me with a text for my remarks to-day. He said:
There were some broad and simple truths which gave a sort of rough-and-ready, rule-of-thumb guide through all these mysteries and tangles (of finance). These simple rules did not require any lengthy explanation. Everyone knew what they were. One of them was 'Pay your debts, and pay them quickly.'
I was greatly encouraged when I read those words. But then I remembered that at the present rate of repayment of our debts, under the Chancellor of the Exchequer's policy, we shall take rather over 150 years to pay off the National Debt. I think I am entitled, therefore, to say that the Chancellor of the Exchequer's practice is inferior to his precepts. Then he went on to say:
When they adopted sound methods of finance they paid the price at the time and got the reward afterwards.
That, again, seemed to me to be admirable, all leading up to a more vigorous policy of debt reduction. Then I remembered that the Chancellor of the Exchequer was himself responsible, or was very largely responsible, for adding rather over £100,000,000 to the War Debt of this country through his post-Armistice operations in Russia, in defence of the various White hopes whose very names we have almost forgotten—Yudenitch and the others.

Mr. SPEAKER: The hon. Member is going rather wide in his remarks. He cannot, in a speech on the Finance Bill, touch Russia and the Chancellor of the Exchequer's views on that question. He must keep to what is in the Bill.

Mr. DALTON: With great respect, it is not my intention to go further than to mention the fact that the War Debt and its magnitude were partly caused
by this particular operation. I shall not pursue the matter further than that. I was then going to make a calculation regarding the Betting Duty. In a full year the Betting Duty will bring in about £6,000,000, which will be barely sufficient to pay the interest on this particular part of the War Debt which was due to the Chancellor of the Exchequer's adventures in Russia, or the adventures which other people had to undertake at the Chancellor's instigation. That is another example of what the Chancellor of the Exchequer calls
paying the price at the time and getting the award afterwards.
The "reward afterwards" in this case is the Betting Duty. With regard to the repayment of debt, I do not wish to go beyond the suggestion which I have already made, but it is high time that the Government had a policy. At present the Government have no policy of debt redemption, except to muddle along at a rate which will mean an expanse of more than 150 years before the whole burden is paid off. That is not good enough, and if we are to face this thing in earnest, we should at any rate envisage some point a little less remote than 150 years hence by which time the whole burden will have been lifted from the shoulders of the taxpayer.
I submit, further, that the taxation of the wealthier sections of the community is much too low, having regard to the necessities of the country. I would illustrate that by referring to certain changes which have taken place since 1919 in the distribution of wealth. The other day the Chancellor of the Exchequer, told us that the fall in wages in this country since 1919—which he admitted had been very great—had been balanced by the fall in the cost of living, his view being that although the wage-earners were getting less money that money was worth so much more that they were as well off in the aggregate as they had been before. I do not accept that view for a moment. But, in so far as there is any truth in it, it has a double application. If the money is worth more to the wage-earners it is worth more to the wealthy people whose money incomes have increased. The increase of wealth in the higher range of incomes has been much larger than would appear from mere
statistics of money value I would
set against one another two sets of facts which I think go to show that at the present time the taxation on large incomes and large fortunes is lower than it should be or a broad view of financial justice. Compare the Income Tax payers in 1919–20 with those who paid Income Tax in 1924–25. I find from the Sixty-eighth Report of the Inland Revenue Commissioners for the year ended March, 1925, that whereas in 1919–20 there were no fewer than 7,800,000 people with incomes of over £3 a week (or £160 a year), by 1924–25 the number had fallen to 4,700,000.In other words, it was nearly halved; 3,100,000 persons who had previously been obtaining £3 a week or more had fallen below the
That is the measure of the way in which wages and small salaries diminished in that intervening period. On the other hand, if you take Super-tax payers, you will find that in 1920–21, the first year in which liability to Super-tax was brought down to £2,000, the number of incomes over £2,000 was 79,000, and in 1924–25 the number had gone up to 90,000. Eleven thousand more had climbed above the line of Super-tax liability. If, in addition, you allow for the fall in prices, it will be seen that the enrichment of that Section of society, represented by Super-tax payers and those just below the Super-tax limit, has been very considerable indeed. In view of that fact, I think we are entitled to assert, without any fear of contradiction, that, during this period, even apart from fiscal policy and apart from the effects of successive Finance Bills, the rich have been growing richer and the poor have been growing poorer. That tendency has been encouraged by the policy pursued by the Chancellor of the Exchequer. He has been only too willing to give the rich a helping hand on their road to greater riches and to give the poor a helping hand on their road to greater poverty, and that is the gravamen of our complaint against the policy of which he is, the author.
4.0.P.M.
It would not be proper for me to sit down without drawing attention on this occasion to one more feature of the right hon. Gentleman's finance, which has had an effect similar to those I have been describing. That is, the tendency to evade national burdens by shoving them
on to the localities, or, in other words, by transferring burdens from taxes to local rates. The policy of the Economy Bill and of much else has enabled this Finance Bill and the Finance Bill of last year to be framed in such a way as to remit national burdens falling mainly on the well-to-do in order to throw corresponding charges on those localities which are less able to bear them. It may be said without exaggeration that the reduction in the Super-tax last year is being largely paid for by the ratepayers in necessitous districts such as West Ham, Bedwellty, and the rest. There is that local shift of burdens in addition to the shift of burdens as between classes of differing wealth in the community. This Bill, for the reasons I have been endeavouring to lay before the House, and for other reasons with which I have not time to deal, is the latest of a series of bad budgets, broken only by the good budget of 1924. This Bill is full of evil and anti-social tendencies, and for that reason we should not be doing our duty if we did not challenge it even in this last stage, and if we did not divide the House against it.
The time has come when we should announce as our policy that we intend to reverse the fiscal engines which the Chancellor of the Exchequer is operating and which are driving the poor ever deeper into poverty while carrying a small minority of the nation through successive tax remissions, upwards towards higher levels of ostentatious wealth and wasteful luxury than have ever before been known in the history of this country. It should be the business of finance to soften social injustices rather than to exacerbate them; it should be the business of finance to lighten unproductive burdens on the community rather than to allow them to remain and to grow heavier; it should be the business of finance to lay the foundations, not for future wars, but for a more hopeful relationship both between nations and between classes within the country. [Interruption.] One way would be to reduce the disparities of wealth which at present give rise to that feeling which the hon. and gallant Member deplores, but I am not going to allow him to draw me too far from the line on which I started, though I should be prepared to discuss the matter with him on another occasion.
My submission, in conclusion, is that whereas these are the objects which a financial policy in an enlightened country should follow the finance of the Chancellor of the Exchequer and of the Government is following exactly the opposite direction. It is moving along the wrong line. It is doing nothing to deal with those heaviest of all burdens which press upon the taxpayers at the present time. It does not adjust burdens fairly as between different classes of wealth and different sections of the community. The time has come to lay down the principle that these engines which are now operating to the detriment of the great majority of the community, and to the benefit of only a small section should be reversed whenever the electors of this country in their wisdom shall decide to reverse the positions occupied in this House by the party opposite and by ourselves.

Mr. PETHICK-LAWRENCE: I beg to second the Amendment.
This instrument, whose Third Reading we are discussing to-day, raises altogether approximately £825,000,000 of revenue, and it can be regarded from two points of view. It can be regarded from the point of view of the total amount which it is proposed to raise, or from the point of view of the incidence of that amount upon the taxpayers of the country. During the progress of this Bill through its various stages in this House it is the second of those considerations which we have had uppermost before us, namely, the incidence upon the taxpayers of the country of the burdens of taxation. This afternoon I propose, very briefly, to deal mainly with the other aspect of the question, namely, the total amount it is proposed to raise. I do this because I desire to put forward what I conceive to be the Socialist point of view upon this question as distinct from the point. of view which is held by the exponents of the other two principal parties in the State.
The essential Liberal point of view, as I understand it, is that all taxation is an evil; that the individual is a much better judge how to spend money than the State, that it would be very much better if the taxation and the expenditure of the State came down and down until it reached something like nil, and that the expenditure of the individual should
be correspondingly increased. That view, if carried to its logical conclusion, would mean that the army of defence—or the whole of the defences of the country—instead of being provided communally by the State, would be provided as it used to be provided in old days, by individuals called upon to raise separate forces in order to join the King in providing for the protection of the country. It would mean that education would entirely cease or would be carried on exclusively by individual educational enterprises instead of in the aggregate by the community as a whole. It would mean that the care of health, instead of being in part entrusted to medical officers of health, would be confined, as a great Liberal thinker like Herbert Spencer very strongly represented that it ought to be confined, to the private medical services which individuals could provide.
Conservative and Socialist supporters agree that certain services are better provided communally than individually, but they differ to a large extent in the services that they favour. As far as I understand the Conservative position, it is that in the main the Fighting Services ought to be provided communally, and that the more money you can spend on those the better, but that, so far as the other services of the country are concerned, the smaller the Budget the better for the country.
The Socialist looks upon the State to some extent as an interested shareholder looks upon the company in which he has an interest. He looks upon the balance-sheet of the State very much as that shareholder looks upon the balance-sheet of his company. He looks upon the Budget statement much as that shareholder looks upon the profit and loss account of the company in which he is interested. When the chairman of a company is expounding the affairs of his company for the year, he does not apologise for the amount of the turnover. (My right hon. Friend the Member for Colne Valley (Mr. Snowden) says that he does apologise if the turnover is too low). But he does not apologise if the turnover is larger than it was in previous years and larger than the shareholders expected it. What he is interested in, and what the shareholders are interested in is to see, first of all and mainly, whether a good profit has been made. That is the main interest of the Socialist
in the business of the State. Of course, where you are dealing with an ordinary company the profit takes the shape of actual money receipts over and above expenditure, and the money is available to be distributed in dividends.
When you are dealing with the balance sheet and the profit and loss account of the State, of course you do not get profits in that technical, monetary form. But the profit that the State derives from its expenditure is just as much real though it is not expressed definitely in terms of money. Hon. Members opposite realise the great profit to be derived from the fact that the defence forces of the country, instead of being provided by private individual expenditure of one body here and one body there, are provided by the country as a whole, and, in so far as it is necessary for us to have a defence force, whether for the external or internal preservation of order, it is perfectly clear that it can only be raised on national and on what I call communal lines. But the Socialist looks also at the other services render a very considerable profit to the community. Those are services that minister to the health and happiness of the people as a whole; and, from our point of view, the profit to be derived by the citizens of this country from communal expenditure on health, education, and other services of a similar character is of the utmost importance to the well-being of the State and the well-being of all the citizens within it.
Coming to the total amount which is raised by this instrument — about £825,000,000—I should like to say that, in the first place, roughly £25,000,000 of this sum comes from special receipts and is not, strictly speaking, raised by the people of this country at all. Therefore, we are concerned with about £800,000,000. It is quite a common thing among large numbers of people in this country to argue that we are proceeding on a very serious course, because we are taking what is roughly 20 per cent. of the national income for the communal services of the country. (The national income is probably nearly £4,000,000,000, and £800,000,000 is roughly 20 per cent. of that figure.) But I would point out that there is a certain fallacy in that method of argument. As a matter of fact, out of the total £825,000,000, only a small half is actually
spent on what I should like to call the communal activities of this country. Before you come to the communal activities you have to consider that part of the revenue and expenditure of the country, which is, in fact, merely re-distribution. Taking first the National Debt charges and allowing for that part of the National Debt charges which goes to America, and it will be found that something like £326,000,000 spent on the National Debt charges goes to individuals in this country. If you add to that sum a sum of £122,000,000, which according to the White Paper dealing with the finances of the country is the total amount spent in pensions, you reach a sum of about £450,000,000. Therefore, out of this £825,000,000, a sum of £450,000,000 is really a redistribution of the wealth of the country, and the communal services of the country are what is left over after that has been taken into account. If you take £450,000,000 of redistribution from £825,000,000, you get £375,000,000, and if you allow that £25,000,000 comes from abroad, you find that that the taxation of the people of this country only amounts to a sum of £350,000,000 a year on behalf of what I call the communal activities of the State. Of that sum about one-third goes in providing the Army, Navy and Air Force, and the other two-thirds go in the general activities which we in the Socialist party, so far from disliking or disparaging, believe to be of the greatest value to the well-being of the community.
I said the main thing which the chairman of a company was expecting to point out was the profit, but, of course, that is not the only question to which he would have to refer and it is not the only question on which the shareholders would expect him to be able to justify the actions which his board had carried out. The second factor would be reasonable economy in expenditure. I wish particularly to emphasise the analogy there, because though we on these Socialist Benches firmly believe in a large communal expenditure on behalf of the social activities of the country, at the same time we are quite as zealous as hon. Members opposite or hon. Members below the Gangway to see that every penny of expenditure shall be economically and wisely spent and shall not be flung away in any method which would not get good value for money.
Finally, the chairman of a company would have to justify the raising of the money and the expenditure on the ground that the enterprises carried out by the company were legitimate forms of enterprise. It is there perhaps that hon. Members opposite will come more particularly into conflict with us on this question when the analogue of the State is substituted for that of the private company. I contend that in this twentieth century we are realising, more and more, that certain things for the benefit of the country cannot be carried out by private means. Education is one of these and there are also the great health services. I do not propose to go into these subjects to-day, because I should then be going outside the province of what we are entitled to discuss on this Finance Bill. But I contend, and I desire to make it quite clear to this House, that where the Socialist point of view differs fundamentally from the point of view of Members of both the other parties is that we do not look upon national expenditure as evil in itself, even though it must be contributed by national taxation. What we demand is that national expenditure shall produce a real profit, in the widest sense of the term, to the country; that it shall be economically administered so that not a penny is wasted, and that the forms of expenditure shall be such as commend themselves to the great bulk of the people of this country.
I said I proposed to address myself mainly to this question of the total amount, and scarcely at all to the question of incidence, but before I sit down I should like to say this. With regard to the incidence of taxation as it is imposed by this Bill, I find myself in agreement with the hon. Member who moved this Amendment. I cannot find that this Bill really carries out the highest traditions of finance. Many of its provisions I regard either as niggling or as vicious, and in particular I single out the further impositions which are made in restraint of trade. The proposals for the repetition of Part I of the Safeguarding of Industries Act I regard, in the main, as injurious to trade. I know it is argued that they will benefit certain trades in this country. I think that argument is fallacious. I believe when the plus and the minus are added up together, it will
he found that the minus has exceeded the plus, and I think that is also true, and perhaps even more true, of the small but obnoxious duty which is to be imposed on wrapping paper. Had the House been full, had all Members been in their places, when the discussion on that duty took place, I am not at all sure that the majority of the Conservative party would have held, because those who were present found themselves in increasing numbers forced to vote against these duties, and this was particularly so when it came to the duty on straw paper. It is a very small thing, but all the same I think those who were present will agree that it was proved conclusively from these benches that the inclusion of straw paper in wrapping paper was, in fact, a piece of sharp practice. I say so because those interested in the industry were told quite definitely that it was not to be so included, and therefore they made no attempt whatever to defend their case. Not only were they told it was not to be included, but up to that time straw paper had not been included in the Customs definition of wrapping paper, and it was not until after the Committee had reported that the whole position was changed and—I suppose for the purpose of giving colour to this piece of sharp practice —that straw paper was included in the term "wrapping paper" in the Customs description of imports. As I say, it is a small matter but it is typical of all this safeguarding business. With the avowed object of buttressing up one comparatively small trade, a certain amount of trouble, inconvenience, expense and injury is inflicted upon a large number of other trades throughout the country. That is why I say that, so far as the incidence of this Budget is concerned and also as regards the perpetuation of certain things in it, I regard it as both niggling and vexatious.
Finally, one word with regard to what I have called the redistribution. Perhaps what I said in the earlier part of my speech might convey the idea that I thought this redistribution of something like £450,000,000, just because it was redistribution could be regarded with comparative indifference. I do not take that view. In so far as this redistribution is used as a cloak for enabling the broadest backs to escape part of the communal expenditure, I think it is a very injurious thing. I
may mention that the contribution which comes from the payers of Estate Duty, Income Tax and Super-tax in this current year only exceeds by £20,000,000 the total charges on the debt. Last year it exceeded those charges by £230,000,000, and in previous years by larger amounts. That, to my thinking, is a very serious thing. From the point of view of illustrating that the communal services of the country do not cost as much as some people suppose, it is quite true you can write off an amount which is simply in the nature of redistribution, but in so far as realising how taxes can operate, redistribution is exceedingly important. It is, I think, obnoxious that the receipts from persons of great wealth should only provide £20,000,000 over and above the amount which goes in the payment of debt. Therefore, although for reasons which I have given I am not one of those who grudge the total figure of this revenue Bill, yet I do feel that so far as the incidence of taxation is concerned, it has not been equitably arranged between the different portions of the community, and, so far as the smaller duties are concerned, I think this new attempt to bring back into British taxation a large number of small petty and vexatious duties is an injury to the well-being of the State.

Mr. RUNCIMAN: The two speeches to which we have just listened attacked the Budget on general as well as on particular lines, and I agree, to some extent, with the views which have been presented to the House by both hon. Gentlemen. I must confess, however, when, I heard the hon. Member who seconded this Amendment say that the Liberal doctrine of taxation might be summed up in the single phrase that all taxes are evil, I wondered from where he had drawn his information. I gathered from a later passage in his speech that he thought Herbert Spencer was the most, typical Liberal in the whole range of British thought, and that was his justification for stating that the view that all taxes are evil, is good, sound Liberal doctrine. I am not altogether sure that the hon. Gentleman was not rather near the mark. He did not hit it. All taxes are disagree able, even if they are not evil. I can imagine circumstances under which taxes would be a positive good. One only has to look across the English Channel to see what would be the effect of a far wider
and more pungent range of taxes than the French people suffer from at the present time. I do not accept the doctrine that all taxes are an evil, but I do say that the form in which taxes are imposed can in itself become an evil, and that is the reason why I object to some of the details of the Budget of this year, as I did to some of the evils of the Budget of last year,
No one can examine the new taxation and the provision which has been made for the collection of revenue in this Budget without realising that the right Ion. Gentleman has fallen back on to the obsolete machinery of Protection in a very small, insignificant, and almost contemptible form. There is nothing like the great wide range of Protective policy which characterised the propaganda of Mr. Joseph Chamberlain in days gone by. There is merely a desire to satisfy, in this direction or that, the Protectionist leanings of the supporters of the present Government. I do not know that these taxes in the total are going to do very much harm in themselves, in so far as they absorb the money of the taxpayer and swell the revenue, but they have an objectionable side, which was mentioned by the Seconder of this Amendment, which is of very great importance. They add to the friction of trade, they impede the transfer of goods, they make it more and more difficult to conduct exchange without interruption. In themselves, they are sometimes badly justified, as, for instance, in the case of wrapping paper, but the main objection that I have to them is that in their cumulative effect, so far from stimulating exchange, they interrupt it, and they also have the additional disadvantage of throwing on the consumer a much larger burden than can be measured by the benefit which comes to the revenue.
I satisfy myself, therefore, to-day with merely registering my objection to the Protective duties for which the right hon. Gentleman has made himself responsible, and with saying; for the last time on this Budget, that in so far as he has attempted to stabilise or render permanent the Protective tariff, such as it is at the present time, he has entered into an obligation which naturally will
not be honoured by his successors and has done nothing whatever to give to the Dominion trader or to the trader in this country that settled and unvarying policy, which is one of the best assets that a business man can have in dealing with forward business. In the days previous to the War, every trader knew that we were not likely to depart from the Free Trade basis of raising revenue, and that, in itself, gave him the kind of stability that he wanted.
The objection, if I may say so, that I take to the views put forward by the Seconder of the Amendment is that, while paying lip service to the importance of turnover, he rather turned his mind away from the source from which turnover must spring, namely, that of production, to thoughts as to the distribution of the revenue so raised. It is far more important for us to-day, as it is more important for the Treasury, to realise the source from which they are to draw their revenue. We cannot have a large revenue in a country with a declining trade. It is absolutely impossible for us to keep up our present scale of expenditure and balance it with an annual Budget, unless the total turnover of the country is fully maintained, and that turnover cannot be maintained, unless the importance of production is constantly present in the minds of all those who are responsible for the conduct of industry. The hon. Gentleman, in the application of the general principle to which he adheres, appeared to ignore the fact that whatever money is taken out of the taxpayers' pocket is not money which is merely put into the hands of the State to spend in place of the private taxpayer spending it. It frequently is money which would have accumulated in the taxpayers' account and would have gone to swell the sum total of capital without which industry cannot be conducted, and the objection to passing it through the State is that there is no such process in any State machinery whereby you add to the capital sum in the national possession. [An HON. MEMBER: "That is Individualism!"] It is Individualism, but it is Individualism on which the State can be built up, and no State can be built up by ignoring Individualism.
What is important is that we should recognise how far these doctrines can be carried. There is one very simple distinction that I should draw between the
old Individualism, such as my hon. Friend learned in his earlier days, and the more intelligent Individualism that is characteristic of to-day, and it is this, that we now recognise that there can be no such thing as the individual being cut off entirely from his environment. He makes his environment, but he is also the creature of his environment, and it is by recognition of that principle that we have plunged headlong into the provision of education, for a whole generation past, at State expense, and it is better that the money should be spent in that way rather than that it should be left purely to individual enterprise. We have learned that in practice. There is also the further fact that these social services, to which he made reference, arc based on the idea of the mutual responsibility of citizens of the State for each other. The doctrine of mutual insurance runs through the whole of our provision for the risks of ill health, of unemployment, and of death, and what is left of the expenditure which is of a communal nature, namely, that which is necessary for defence, should be kept within the strictest and narrowest possible limits; and if some of us, who are constantly preaching the doctrine of disarmament, are doing so, guided, as we are naturally, by a peaceful sentiment, we are also keeping in mind the fact that Europe in its present impoverished state cannot attempt profitably to go on, year after year, maintaining as large military forces as it had before the War.
On that, I only make one comment, because the expenditure of the year is not necessarily under review on the Third Reading of this Bill, and it is this rather remarkable fact, that if you assess the military expenditure of Europe in terms a francs, the military expenditure of this country is actually at the head of the list in Europe. I admit that that is not altogether a fair test, but it is a very remarkable fact that, assessed in terms of francs, it is actually higher in this country than it is in any other country in Europe. Let me take a moderate test, I do not want to take the franc at 250, but I will take it at 140, which is probably rather lower than the amount at which it will be stabilised. Even at that, our Army expenditure in this country exceeds that of France. That is a very startling fact, and it is one which must constantly be kept in mind by this House
when it is pressing on the Government an extension of our military liabilities.
I return to the main source for which revenue alone can be raised, and that is the total turnover of the country. Turnover is, after all, the only means by which revenue can be provided. There has been a very grave interruption in the turnover of this country during the coal stoppage,and I should like to examine how far the revenue of the right hon. Gentleman is likely to be affected by the coal stoppage of the last nine or 10 weeks. We can assess it in detail, but, of course, no one can arrive at an accurate total of the loss which has conic to the country as a whole by the stoppage in the coalfields. What we can do is to take a rough estimate, such as was attempted at the close of the general strike—and I think the figures have not been challenged seriously in any quarter—namely, that the total loss to the country during that period came to at least £30,000,000. If we then take the period from the 16th May to the 16th July, I think it is fair to say that the loss owing to the stoppage in coal mining has come to at least £28,000,000. The loss on the railways has been less than, I think, most people anticipated. During the same period, compared with 1925, there has been a diminution of traffic in goods of about £1,400,000, and in passengers of about £600,000, or £2,000,000 in all. The two big categories in the metal list, pig-iron and steel, show, of course, far and away
the greatest drop. They are directly dependent on the provision of coal, and it naturally follows that under the headings of both pig-iron and steel there has been a very big and almost sensational fall in the exports from this country and in the production for home use. If you take together the pig-iron produced for home use and that which is provided for export, there has been a loss during the same period of at least 1,000,000 tons. I assess that at only £5 a ton, but that means a loss under the heading of pig-iron alone of something like £5,000,000. In the case of steel, there has been a loss of at least 1,200,000 tons, and that, I think we may fairly say, represents something just under £10,000,000. If you total up what may be called these big, heavy losses which are the direct result of the coal stoppage, it is certain that at least, in our home and export- trade, the loss represents £45,000,000.
Now I turn to the textile trade. I am taking each one of these, because they are the basis upon which the right hon. Gentleman must naturally build up his revenue, and I want to assess the possible diminution in his revenue. Take the textile trade. In the export of cotton—I do not know what has been the output for home purposes; I can only make a guess at that, but in the export of cotton —there is a drop of £7,700,000 during the period from the 16th May to the 16th July in woollens, there is a fall of £1,660,000, and in other textiles a fall of about £176,000; and in the case of wholly or mainly manufactured goods, the drop in the export comes to no less than £17,500,000 during this period. if we add up these various categories, we come to the first total, but, of course, not the final total, of the dead loss which this country has suffered from the coal stoppage. If we add them up together there are £46,000,000 for home and export trade in what may be called "heavies," there is a loss on articles mainly or partly manufactured for export only of £17,500,000, and there has been a loss in one or two other smaller items, bringing the total in these categories up to no less than £63,500,000 during that period of some eight weeks. It is only fair to add to that the drop which there has been in the production of goods for home consumption, and as far as it is possible to draw up any estimate at all, the figures seem to lie somewhere within the very wide range of from £13,000,000 to £20,000,000, probably nearer £20,000,000 than £13,000,000. Then we have also to add to that large total the amount which has been lost in wages, and so far as the miners are concerned, it appears to be an accurate estimate that no less than £25,000,000 has been lost in wages to them during the stoppage of the general strike and since then. Of course, it does not mean that they have deprived the other industries and trades of this country of £25,000,000 spending power, because to some extent that has been made up by money subscribed in relief and distributed to the trade unions, and so on. It is, nevertheless, a loss to a very important section of the industrial population. If they have lost £25,000,000, I am sure that there can be no doubt about it that workers in other industries have lost at least
£10,000,000 in wages during the last few weeks.
Let me sum up the totals. We find ourselves in this position: a loss of £30,000,000 during the general strike; £63,500,000 in the export trade, about £20,000,000 in the home trade, £25,000,000 loss of wages to miners, and £10,000,000 loss in wages of the workers in other industries, making a total of £148,000,000. This, in itself, is not the end of the tale, for there have been large numbers of industries which have suffered during that period. Let me take one of them. There is the direct. effect of the stoppage in the export of coal and in the provision of coal bunkers for the shipping trade. The amount of laid-up tonnage has nearly doubled since the 1st April of this year. There a-re now 1,376,000 gross tons of shipping idle in British ports, against 736,000 tons on the 1st April. That, in itself, means a loss of £700,000 during that period. But what is of even greater importance is the effect of this in the widening of the circle of industries —growing wider and wider as the weeks go on.
We have lost £160,000,000. That by no means covers the whole ground, for every one of these industries has in itself other industries dependent upon it Their purchasing power is reduced. The demand for their ordinary commodities disappears. The range of unemployment must in itself go over a far wider territory than anything we have been able to estimate during the last eight weeks if the stoppage continues. That is one of the effects of the coal stoppage which nobody can estimate. The only thing of which we can make sure is that, bad as may be the drop in the total national turn-over and in the present national revenue, it will grow increasingly greater as the weeks pass by.
I should like to say two or three words on another aspect of the same subject. We know that this stoppage is likely to have a detrimental effect upon the Revenue. It also has a very seriously detrimental effect upon the national credit. Nothing can be of more importance to the Chancellor of the Exchequer than the provision that must be made during the next three years for funding the rapidly maturing Debt. I am sure it must be constantly in the mind of the right hon. Gentleman that there is no less than £950,000,000 of short-dated Debt
falling due for maturity between now and 1929. The success which he has in funding at a low rate of interest will decide in his future Budgets very distinctly the amount of taxes to be provided by the taxpayer in the years to come. For instance, if the right hon. Gentleman were able to take the whole of that matured Debt during the next three years and put it on a 4½ per cent. basis—which is by no means an unreasonable hope—he would save the taxpayer at once
£20,000,000 or £30,000,000. If he could get it upon a 4 per cent. basis, he would increase that saving each year as the maturities were met, and also provide for a very large saving in interest charges. I see no prospect of his being able to do that under present conditions.
In the first place, there has not been left anything like a large enough margin of revenue over expenditure to leave him a very large surplus to make up for the stoppages during this year, especially the coal stoppage which we have been attempting to assess this afternoon. It will make it all the more difficult for him to have available in this country a very large amount of available capital for investment at the time when he wishes to change his long-dated into short-dated loans. There will always remain a demand in the City of London for short-dated paper. it is an essential part of our financial system. Every chance that we have is diminished by the effect of the stoppage in the coal mines and in the coal trade, and in the export trades which are frequently dependent upon them. We may truthfully say that the effect of the coal stoppage touches not only those directly concerned in the various industries; not only touches those who are the consumers of coal, but also is of direct importance to the taxpayers as a whole. Very few can hope to see any reduction in taxation in the years to come unless the right hon. Gentleman can fund a great deal of the debt at a lower rate of interest.
Notwithstanding the fact that the outlook at the present time is dark, and that we see very little chance of an immediate settlement and a resumption of work, we can, at all events, say that indications in other directions show how eagerly the commercial community—the great manufacturers, and those who represent the big concerns, as well as those engaged in the trades themselves—
are anxious to supply the needs of the world. Given the opportunity to do so, they will show not only the enterprise which is necessary but that eagerness to do what is required for the countries which live very largely on the exports from Great Britain to satisfy their needs, as well as add, to our own national income. That we are capable of doing that I have no manner of doubt. There is very little doubt that anyone who makes a full survey of British industry can see that in almost every department it is more efficient than it was 12 or 15 years ago. The textile trades are equipped with more modern machinery. Their methods are more up-to-date. Their organisation for selling abroad, their representation in the great Asiatic markets, is better, more skilful and more energetic than it was 12 or 15 years ago. In the engineering trade you have more skill, adaptability and ingenuity, while designs and manufacture are rapidly on the increase. The finest textile machinery in the world is still produced in Lancashire. If we turn to the very large categories of manufacture—the making of peat ships and the engines which propel them—we have in one or two instances been outdistanced by our competitors abroad. We are rapidly making up the leeway at the present moment. Some of the finest internal combustion engines in the world are made in this country. They are of British design, and not dependent in any way upon foreign origin for their ingenuity or efficiency. All these various trades are ready to take full advantage of any opportunities, as they have done in the past, when a resumption of work comes in the greatest of our producing industries. Whatever effort is made by those in authority in the industry, these others are in a position to bring about a rapid resumption of activity, of coal production, of the manufacture of iron, and the extension of our engineering trade, which will confer benefit not only upon the right hon. Gentleman—who is by no means free from anxiety—not only upon the taxpayer as a whole, but upon the consuming community of the world, who are largely dependent upon what We sell and send to them.

Mr. DUFF COOPER: I do not think that the right hon. Member for West Swansea (Mr. Runciman), who has just
sat down, was justified in complaining of the hon. Member for West Leicester (Mr. Pethick-Lawrence) for having quoted Herbert Spencer as representing the true Liberal doctrine with regard to taxation. The right hon. Gentleman must realise that for those who are outside any of the Liberal camps and who can hardly follow the kaleidoscopic changes that go on within them it is very difficult to know where to turn in order to obtain the orthodox faith of Liberalism. Just as during the days of the Great Schism, when there were two or more Popes in Europe, seekers after the true faith were compelled to turn to an earlier source than any of them in order to obtain the truth, which led to the Reformation, so to-day we are driven to the works of some of the earlier apostles of Liberalism in order to obtain the true doctrine. Nor can I congratulate the right hon. Gentleman on his correction of Herbert Spencer. In the old days Liberals thought more clearly and used less equivocal language. Herbert Spencer said boldly that all taxation was evil. But the right hon. Gentleman the Member for West Swansea, dealing with this subject, said he would not go so far as to say that all taxation was an evil, but that all taxation was disagreeable. This differentiation was to my mind, a splitting of hairs that will not bear splitting, and I think that Herbert Spencer would have held that the words "evil" and "disagreeable" when applied to taxation meant very much the same thing. I think the Chancellor of the Exchequer is to be enormously congratulated upon the success of his Budget. If anything would convince me more than I am convinced of that view it would be the speeches to which we have listened this afternoon—it would be the interesting and illuminating way in which the three hon. Members who have spoken have not dealt with any single proposition contained in the Finance Bill.
The hon. Member for West Leicester in his speech made some sort of vague reference to paper. A vaguer reference to Preferential Duties was made in the speech of the right hon. Gentleman the Member for Swansea. When the betting tax was mentioned by the hon. Member for Peckham (Mr. Dalton) it was only to
connect it in some way with the Russian Civil War of seven years ago. We have not really heard a word about the Finance Bill as such. We heard from the hon. Member for West Leicester a very interesting lecture on Socialism, but the Budget is not meant to be a Socialist Budget, and the hon. Member for West Leicester does not do the Budget any harm by saying that it does not conform to any of the principles of Socialism. The hon. Member began by saying that he was going to deal with the question of the amount raised, and he was going to criticise that. Many hon. Members, perhaps, would agree in the criticism of that amount by deploring the size of it. On the contrary, the hon. Member for Leicester considers that the amount is not enough. He wants to see a very much larger sum raised. All these items in the Finance Bill which we were told had provoked much violent opposition, and which we have had detailed in the Press and in speeches inside and outside this House, and which have been talked out over and over again, the Betting Tax, the raid on the Road Fund, Preferential Duties, and the Safeguarding of Industries, not one of these has found its way into the three speeches to which we have listened from the hon. Members opposite, from two Socialists and one Liberal.
Therefore I cannot see how the right hon. Gentleman the Member for West Swansea can justify himself in voting against the Bill, bearing in mind the survey of the financial position which he has given us. Hon. Members opposite, of course, will vote against it, but they cannot expect. to convince anybody else that their view is right, and that this is a bad Bill simply on the ground that it is not a Socialist Budget in any sense of the term. I expected the speeches to deal with the most novel feature in the Finance Bill, and that is the Betting Tax. I have listened to the Debates in the former stages of the Bill, and have always been surprised that the real charge against the Betting Tax has never been formulated.
It was said that the chief argument against it was the moral argument, and,
if the real argument is the moral one, the Government would have to give it serious consideration. But, although everybody has mentioned the moral argument, nobody has ever in this House, as far as I am
aware, said that betting is wicked and wrong, and, unless it is, there is no moral argument against betting. I say quite frankly that I do not think it is wrong, arid I shall be glad if, before the Budget finally passes, anybody who takes the opposite view will give us some reasons why he hold it. I can find no condemnation of gambling, for instance, in Scripture. That may sound an old-fashioned argument, but it should still carry considerable weight. I believe, on the other hand, that in the Koran betting is condemned, and perhaps it, is natural that some of those people who wish to introduce the Mohammedan rather than the Christian view of alcohol should also wish to introduce another precept of Mohammedan morality. I am strengthened in my view, because I have found that nobody is ashamed of betting, and people are ashamed of doing wrong. Even that pattern of stern morality the right hon. Gentleman the Member for Come Valley (Mr. Snowden), informed us that at an early stage of his life he indulged in a small wager to the extent of 6d. which was not successful. We all listened to that confession with amusement, and the right hon. Gentleman made it with a smile on his face. If he had had to confess that, even at the age of 13 and even for so small a sum as 6d., he had committed a theft, he would not have done i with a laugh, and the announcement would not have been received with amusement.
5.0.P.M.
The right hon. Gentleman the Member for Spen Valley (Sir J. Simon) also told us that he had occasionally betted to the extent of half-a-crown. He would not have confessed with the same airy unconcern that he had stolen half-
a-crown. Yet he compared gambling with prostitution, as though the two things were analogous and could be compared. There is one great difference between them: the one thing is wrong and the other is not. If hon. Members would keep that distinction clearly in their minds, they would not be led away with humbug about the moral side of betting. We have all been deluged with tracts and literature with regard to this Betting Duty. I have studied some of that literature and tried to make out how some of the reverend gentleman who are the authors of the tracts justify their very strong moral objections to betting. The most in-
genious of them, having searched the Decalogue in vain for any condemnation of it, say that they have found it in the Tenth Commandment. They say that the man who bets is committing the sin of covetousness. But I would ask them how can they seriously hold that view, and, if they can, can they pretend to have any knowledge of human nature? We all know the covetous man. We find him in all departments of life, but the covetous man is not a betting man; he is not such a fool. The avaricious man, who thinks solely of amassing wealth, does not waste his time or money in betting. The spirit that drives men to commit the folly of betting is exactly the opposite. It is the spirit of placing too little importance on money affairs, and regarding them in a reckless way and of not taking due thought for the future. For all these reasons, I submit that the moral argument against the tax will not hold water.
Once you have got away from that argument, how are you to look upon the practice of betting? It is a. foolish practice, and those who bet most will agree most heartily that it is. It is a foolish practice, which, practised as it is so universally in this country, becomes a serious social evil. Is it then the duty of the Government to attempt to ignore it, to look the other way, and allow it to go on; or is it their duty rather to attempt to restrain it, to restrict it, to control it, and, if possible, to derive some real benefit from it to the whole community? Surely that is the Government's duty, and that is exactly what the Government ale doing. My only regret is that it is still being found impossible to include all betting transactions in the present proposals of the Government. I hope that in next year's Budget some practical proposal may be brought forward to include street betting as well as credit betting and betting on the course. I always feel strengthened in the certitude of my own view being right when I find myself being opposed by extremists, whether they sit on my right hand or my left hand; but the most satisfactory situation of all is when one finds. oneself faced by two bodies of extremists, sitting at the two opposite ends of the pole. That is the position of those who are opposing this Betting
Duty to-day. Of all the strange alliances in the history of politics, there is surely nothing stranger than the alliance between the Puritan and the bookmaker. Although we have heard less of the bookmakers' arguments in this House, they have had a considerable weight in influencing public opinion, and their voices, powerful if riot musical, with which those who have visited the race course are familiar, have been raised in indignant protest and have found their way into the Press to a greater extent than the voices of the Puritans. I have received a great number of letters and circulars from bookmakers giving me most moving and painful pictures of the harm that this tax is going to do I have heard of gentlemen who are in the habit of betting to the extent of £10,000 or even £100,00, and it has been made plain to me that they will be faced in future with the alternative of either reducing their stakes or else being put in the impossible and intolerable position of having to give up betting altogether. I think it would not be a great loss to the community if these gentlemen did retire from the arena. The argument that these big punters, who are to be hard hit by the Betting Duty, are the backbone of racing is absolutely untrue.
As in all financial transactions, in which huge sums are involved, it is not the few people of great wealth who count; it is the huge number of people who make small bets, and they will, I am afraid, continue to bet as cheerfully in the future as they have done in the past. They may realise that the real effect of the Government's proposal will be to make betting a little bit more of a "mug's game," that the odds will be a few pounds more against them, but that will not deter them from having their occasional, or even their regular speculations. Racing will go on exactly in the same way, and, if betting be diminished to some extent, as has been allowed for in the Government's proposals, so much the better for everybody concerned. The most satisfactory way of dealing with some of the literature which has been produced on this subject would be to forward occasionally to those people who say that the Betting Duty will increase and encourage betting enormously the circulars which one receives from the bookmakers, which prove conclusively
that it is to have exactly the opposite, effect. And, in order that the bookmakers may not think they are being treated with incivility, it may be permissible to send them some of the tracts pointing out the enormity of the offence which they are committing and seeking to persuade them to give up this method of earning their living. That has largely been the policy with which the Chancellor of the Exchequer has so successfully met the various attacks that have been made upon him, and I think he is to be congratulated upon the way in which he has avoided the Puritan Scylla and the Charybdian bookmaker, and steered his barque successfully between the two, bringing it laden with revenue safely into the harbour of the Treasury.
I should like to say a few words of criticism or perhaps of warning or perhaps of exhortation to the Chancellor of the Exchequer. The hon. Member for Peckham criticised the Government on the ground that too much was being spent on armaments. That criticism I entirely support. We have been disappointed in the promises which the Chancellor of the Exchequer made last year to effect substantial reductions. He has been, I am sure, more disappointed than anyone else, and I only hope his disappointment will not discourage him or retard him from resuming the struggle. He will shortly be engaged again in the conflict with the great spending departments, which every Chancellor of the Exchequer has to take part in annually in this country. He came off badly in the battle last year; I hope be will prove more successful this year. I can assure him that he will have the whole-hearted support of many in his own party who believe that there is no danger threatening this country at the present day which is half so great and imminent as the danger of excessive expenditure. Some people think that the Liberal party is gradually passing away and that it will no longer fill any place in the councils of the nation. It has even been suggested that it has already passed away, and that hon. Gentlemen opposite are merely the ghosts of a party that once existed. I do not know how that may be; but, if it dies, it will probably die intestate, and its possessions will be divided between the survivors. The old theories, the old beliefs, the old battle-cries, the old watchwords, the old ideals,
some of them will be pounced upon by the Labour party and some may fall to our share. I recommend the leaders of my own party to stake out an early claim to one of the old Liberal watchwords that has lately fallen on evil days; I mean the word "retrenchment." The claim should not be disputed, because it has been made abundantly clear by the speeches of hon. Gentlemen opposite that the Labour party will never lay any claim to retrenchment. Let us make it one of the principal planks in the Conservative platform. Let us, in the next few years that lie between us and another appeal to the electorate, give some practical proof that it is a real part of our practical policy and that we are determined to put it into force. "Peace, retrenchment and reform," are the three watchwords which used to go together. I think we would do well to concentrate on retrenchment, as all the others must follow it. Without peace we cannot have retrenchment, and without retrenchment we can no longer afford to reform.

Sir FREDRIC WISE: I entirely agree with what has been said by the hon. Gentleman who has just sat down with regard to rerenchment. He referred to the Liberal party, and although the Liberal party may be in a bad position I should like to congratulate the right hon. Gentleman the Member for West Swansea (Mr. Runciman) on the figures which he has given to the House. I am sure they will be a very great asset to the Chancellor of the Exchequer. I have personally made out similar figures, but I am afraid they are even worse than his, in showing the great loss which the country has and is sustaining in the strike and the lock-out. The hon. Member for Peckham (Mr. Dalton) said the Chancellor was singing a song in a minor key. I often think he sings in too high a key, and that he does not realise the terrible gravity of the situation, and I sincerely hope the figures mentioned by the right hon. Gentleman the Member for West Swansea will be carefully considered by him. The hon. Member for Peckham also dealt with the question of the loans. I am sure he must realise that all our Government loans have a fixed redemption date except Consols. I understood him to say, or to insinuate, that the loans have not a fixed redemption date.

Mr. DALTON: May I make my point clear? What I was saying was that we
ought to fix a date within which the whole of the debt should be repaid and not merely re-borrowed on maturity.

Sir F. WISE: It would alter the whole prospectus of the issue of the loans if there were any method of altering the redemption dates, say, to 30 years. To think that this vast sum could possibly be repaid in 30 years is beyond comprehension. It would mean a gigantic increase of taxation, not only of Income Tax and Super-tax, but also of indirect taxation, which I know the hon. Member is against. If the Chancellor realises that the revenue of this country depends on its trade and commerce, he must understand that the revenue, and especially the Income Tax is bound to depreciate in the next year or two. I do not know whether he has studied the balance-sheets which have been publishedrecentlybyfirmsin the unsheltered trades, such as Armstrong, Whitworth and Company, John Brown and Company and the Ebbw Vale Company. The first two are firms of the highest standing—Ebbw is, also—which have paid dividends regularly up to this year. I often think it is the excessive burden of local rates and local taxation which affect these firms as much as anything. The chairman of one important company stated in his speech that in Britain the cost of Poor Law, workmen's compensation, old age pensions, health insurance and unemployment insurance is £3 18s. 6d. per head of the total population in 1925, or more than twice what it is in Germany, six times greater than in France and 25 times greater than in Italy. This heavy charge must affect our trade and our power of competing for the world's trade. The cost of our National Debt services is very high. We are not in a position to compare ourselves with Germany, which has repudiated her debt. Our services, that is, the interest on the National Debt, cost about £304,000,000 a year, while the cost to Germany for interest, excluding the Dawes payments and any external loan, is only £5,500,000.
It is almost impossible to conceive what that weight of interest must mean to the traders of Britain in competing with the rest of the world; but in spite of it there must be no repudiation by us, no inflation, and no capital levy. We have got to stand by it. We have got to deal with it
by way of the Sinking Fund. I think I may say the Sinking Fund is a friend of mine. I believe in it. It places our credit on a sounder and firmer basis, but it loses its value and its weight if our expenditure rises. The Sinking Fund will do five things. It will reduce the National Debt, it will reduce the interest on the National Debt, it will reduce taxation, it will release for trade Government money which is unproductive, and it will advance the credit of the country. As I said before, the Sinking Fund is a friend; but £60,000,000 a year for the Sinking Fund is almost more than the country can stand at the present time, especially in view of our troubles over the general strike and the lock-out in the coal mines. After the Civil War in the United States it was 12 years before the United States started a Sinking Fund. I do not say we should copy that, but £60,000,000 is a vast sum to take out of the taxpayers' pockets at the present time.
If there is one thing we must have in the country it is cheap credit—we live on cheap credit—but the financial liabilities of this country have been going up by leaps and bounds. I refer to the Financial Bills and Financial Resolutions which are passed in this House. I congratulate the Chancellor of the Exchequer in stopping at the £75,000,000 for the Trade Facilities Bill; but there is the Credit Insurance Scheme. I am told the Credit Insurance Scheme will not take any money out of the taxpayers' pockets, but there it is; and there are the Agricultural Credits Scheme, and the liabilities under the Small Holdings and Allotments Bill which went through the Second Reading on Friday; and there is the credit which, I understand, will be guaranteed under the Electricity Bill. I think it is wicked that the taxpayers should guarantee the money to. be raised under the Electricity Bill; it could be raised without the taxpayers' guarantee. To guarantee that sum of £44,500,000, principal and interest, is a loose way of playing with Britain's credit.
Coming to the expenditure of the country, I cannot help thinking that it is really alarming. Government expenditure has increased since the Conservative Government came into power. On the Third Reading of the Finance Bill
last year my right hon. Friend the Member for Norwich (Mr. Hilton Young) spoke and made an excellent speech dealing with expenditure, and the Chancellor of the Exchequer interrupted him to ask where a reduction of expenditure could be brought about. Naturally it was not for my right hon. Friend to say how a reduction could be obtained, but I believe he could put his finger on some of the policies which would bring about a reduction. I was hopeful during the Budget speech when the Chancellor of the Exchequer said, "Expenditure governs the position"; but, if he will forgive me saying so, I do not think he yet realises the fever of this terrible expenditure. In 1923-24 our expenditure was £789,000,000; this year it is £824,000,000. What is the position as regards the quarter's revenue, from 1st April to 30th June? That must be a very black spot to the Chancellor of the Exchequer. In saying this, I hope that one's constructive criticism may be listened to in a small way. The revenue for the first quarter of this year amounted to £146,000,000, a decrease of
£22,000,000; the expenditure was £224,000,000, an increase of £4,000,000. Those are very bad figures, and they must warn the Chancellor of what is coming. The returns of Income Tax, issued this morning, show a reduction of £13,000,000, and the Super-tax returns, which no doubt worries the hon. Member for Peckham, show a reduction of £5,000,000 since 1st April, compared to 1925 figures. The Floating Debt has increased during the quarter by £70,000,000. Those figures are very serious, they paint a sad and a bad picture, and I feel that the sooner something drastic is clone the better it will be for the country and for the taxpayers.
I know the Chancellor of the Exchequer has the assistance of a Cabinet Committee, but I do not think that is sufficient. I think he ought to set up another Committee to go into expenditure, and do so at once, in order to see where reductions can be made so that, possibly, there may not have to be too large an increase in taxation next year. I would humbly suggest to him that the Government should stop issuing all credits or subsidies. In his speech last Saturday the Prime Minister showed that he was against subsidies, and the Royal Commission on Coal stated that a subsidy for
the coal trade would be absolutely wrong. I cannot help thinking that a certain policy might be carried out in regard to reorganising the Ministries. I know it would be difficult, but the Chancellor likes difficulties—I am sure he does, he always has; and I wish he would endeavour to face this difficulty, and that he would also look at the figures of the quarter's revenue and the quarter's expenditure, which are alarming. We are heading to national bankruptcy. What is to happen about our trade balance next year? Last year our trade balance was only £28,000,000 to the good, and, as far as one can see, it will be very much worse this year.
May I further submit that finance is the life of the nation. It is a jumble of technicalities, a forest of figures, but I hope the Chancellor of the Exchequer will not be afraid on that account. Our people have been taxed up to the hilt, and evidently, judging by the figures the right hon. Gentleman the Member for West Swansea has given us, we must look forward to further taxation. The camel cannot live on its hump, and the British nation cannot live except by cheap credit. I hope the Chancellor of the Exchequer will put his foot down with regard to expenditure and the giving of credits. Let him guide Britain; let him show that we in this country are ready to reduce expenditure; let him realise that every penny he takes from taxation comes out of the pockets of the people, and when he realises that I feel sure he will understand the gravity of the national financial situation.

Captain WEDGWOOD BENN: The hon. Member for Oldham (Mr. Duff Cooper) complained that the Budget had not been attacked from this side of the House. I do not know how far that criticism is justified, but certainly an attack has been made from the opposite side by the hon. Member for Ilford (Sir F. Wise) who offered some very damaging criticisms in regard to the rate of expenditure. The hon. Member for Oldham said that there was no ground for attacking the Betting Duty on the moral issue, and he described the social evil which it represents, but surely that is an attack on the moral issue. If the hon. Gentleman will go to the housewives whose weekly budget is diminished by the amount wrongly wasted in betting,
he will find that they regard the issue as one being very near a moral issue, as well as an important financial consideration in their domestic budget. Complaints have been made about the subsidies and their extension. Some of us on this side of the House voted against the biggest of all subsidies which was proposed last year. I know we took a great risk, because a great body of opinion was on the side that it was worth finding £23,000,000 or £24,000,000 to get a nine months' respite in regard to the coal strike. We spent that money, and we got nothing in return. The failure of hon. Members to object to that subsidy, I cannot understand. When we protest against further expenditure on armaments, and when we show a few instances in which further reductions are possible, we get no help in that way from the hon. Member for Ilford or the hon. Member for Oldham.
We suggested that those countries whose growth of armaments is greater than ours should be asked to consider a reduction of those armaments when they come to us asking for a. reduction in their terms for repayment of debt to us, but the right hon. Gentleman the Member for Norwich (Mr. Hilton Young) poured scorn and contempt on the whole suggestion. That is not the view that is held by responsible statesmen in America. If hon. Members would only read the speeches made in America, they would find that American statesmen attach great importance to disarmament and debt settlement. When other countries interfere with our domestic affairs and ask us to tax our people in order to carry their burdens, it is not enough for the Government to say that we should like to see them at a round table conference.
Since the Budget proposals have keen put forward, a large amount of new evidence has come to hand. Take the case of the duty on wrapping paper. I was told the other day that the London County Council had been presented by their contractors for paper with a demand for a 10 per cent. increase on their contracts because of the rise in the price of paper due to the new tariffs. Take the motor ear duties, which were supposed to be doing such a wonderful amount of good to the motor car trade, and the recision of which was supposed to damage the motor car trade. Mr. Morris told us that on account of this
foreign competition the whole motor industry was threatened and might come to smash, but his firm were actually manufacturing nearly twice as many motor cars in the year when he had no duties as in the year when he had them. I want to take advantage of the presence of the Chancellor of the Exchequer to apologise to him for suggesting what I did in regard to the Imperial Conference in 1907. Speaking at Edinburgh, in May, 1907, the Chancellor of the Exchequer said:
They were told the Government had banged the door. Well upon what had they banged the door? They had banged the door upon Imperial taxation of food. Yes, they banged it, barred it, and bolted it.
Anyone who reads the Report of the Imperial Conference of 1907 will see that at times the flow of the right hon. Gentleman's eloquence was checked by those well-informed Imperial statesmen who were present. The Chancellor of the Exchequer made a speech on Imperial Preference, and before the House meets again it will be necessary for the Chancellor of the Exchequer and the President of the Board of Trade to sit at the Conference, and develop the system of Imperial Preference. Therefore, I should like to ask the right hon. Gentleman what is going to be done, and whether he can find any flaw in the following arguments, which I have summarised from his speech in 1907. He
puts aside the question of remission of existing taxes: this admittedly would only be of consequence as 'conceding the larger principle.'
I want to know if that argument holds good now with the right hon. Gentleman? I think what I am quoting from is the best statement against Imperial Preference that has ever been made, and
wish to ask the Chancellor of the Exchequer whether, in the light of his later experience, he can find any flaw in any of these arguments. The Chancellor of the Exchequer also said:
Imperial Preference would bring Colonial affairs into Parliamentary Debate, which is objectionable.
Is that not exactly what has happened? We have discussed on this question of Imperial preference subjects like the incidence of Imperial defence and other matters touching Colonial affairs which would never have been raised if preference proposals had not been presented
to Parliament. In the same speech the right hon. Gentleman says:
No fair system of Preference can be laid down which does not include taxes on bread, meat, dairy produce, wool, loather, and other staples. This means seven or eight new taxes.
If that be so, then the present system is an unfair one. What are you doing for New Zealand? I know you are doing a great deal for Canada, but what is being done for New Zealand? We have no more loyal Dominion than New Zealand and we all know what she has done for Imperial defence. What is the Government doing for New Zealand by these preferences? Simply nothing at all. At the Imperial Conference in 1907 the Chancellor of the Exchequer said:
Such an introduction can be calculated to produce an anti-Colonial party in this country.
The moment we come up against the fact that we cannot reduce our own taxation as hon. Gentlemen desire because we have entered into a bond with the Dominions and are no longer masters of our fiscal system, then the prophecy of the Chancellor of the Exchequer will be fulfilled.

The CHANCELLOR of the EXCHEQUER (Mr. Churchill): Perhaps the hon. and gallant Member will permit me to remind him that at that time the proposals of Imperial Preference were based upon protective taxation of bread and meat To that I was opposed, and I am still opposed. While we were engaged in opposing this change which we considered likely to be detrimental, it was perfectly natural that every minor aspect of preference, such as the concessions suggested, should be scrutinised from the point of view of whether they did or did not vitiate the general resistance to the taxation of bread and meat. That has been definitely ruled out of the programme of any political party in this country, and it plays no part in the proposal for which this Government or the previous Conservative Government was responsible. In these circumstances, we are free to consider the remaining aspects of the question.

Captain BENN: That does not seem to touch the points which I am raising. The right hon. Gentleman now says that bread and meat must not be touched. What about wool?

Mr. CHURCHILL: If a duty were imposed in this country, the Dominions would be given a preference, and, if a duty were imposed on wool, a preference would be given in that ease. But there is no proposal or suggestion of imposing a duty on wool.

Captain BENN: These duties are constantly being introduced, and we want to know how far they may cause further duties to be presented. The Chancellor of the Exchequer went on to say that
The value of the preference would lie in a better price and not in a greater volume of trade. The benefit hoped for is that of giving to the Colonial producer the price of the foreign supply, plus the tax.''
I ask the Chancellor of the Exchequer whether anything that has happened since 1907 has at all invalidated the strength of the argument that the value of the preference would lie in a better price. The right hon. Gentleman had considerable discussion with Dr. Jameson and Mr. Deakin, and they declared that the value of the preference was to enable the colonial exporter to extort a better price from the British consumer. After the lapse of 18 years, I would like to ask the Chancellor of the Exchequer if he has come to the conclusion that Mr. Deakin's view on the subject was better than his own. Clause 7 introduces the principle of locked preferences. It is quite true that Parliament is a sovereign assembly, and it cannot bind succeeding Parliaments. The proposal is that the preferences should be stabilised for 10 years, and they will regard that in exactly the same way as they would regard a treaty. It is not, however, a treaty, because this House cannot alter a, treaty. It is a unilateral treaty, if the Chancellor of the Exchequer prefers that expression. It is a declaration on our part, and they will believe it is a firm declaration, that, for a period of 10 years, a certain money preference will be given. Already trouble is beginning. There are two of these preferences which are of considerable value, one more particularly. There is the question of cameras from Canada, and already there is a great outcry from the camera manufacturers in this country against giving this preference to cameras from Canada, because they allege that they are really of American manufacture. Therefore, the locked preference argument is
already answered. Then there is the question of motor cars, which, of course, are a considerable item.

Mr. CHURCHILL: The hon. and gallant Gentleman has introduced a phrase which has not been heard for many years. He speaks of the distinction between a free preference and a locked preference. I think I drew that distinction in those days, but the hon. and gallant Gentleman must attach to that distinction the meaning which was attached to it at that time. A free preference, in my opinion, is a preference such as we are giving now. It is given because, as far as we can see, it will do us no injury, and we hope it will help the Dominions. They give similar preferences to us. A locked preference would be a preference given by the Dominions to us or by us to the Dominions as a reciprocal matter, as a matter of fixed bargain on both sides, and that would to a very large extent tie the hands of Parliament. That is the distinction that I have tried to draw.

Captain BENN: I dare say the term "locked preference" was a very useful term in those days, but, in fact, there is no issue of substance between us. If we say to the Dominions that we are going for 10 years—they believe it is of some value, though, in fact, it is not—to give them something, and they reply that for 10 years they will give us something else, we may call it reciprocal freedom, but, in fact, it is a locking. In fact, industries will be built up in the Dominions on the strength of Clause 7 of this Bill, and that, will bind Parliaments in the future either to maintain these duties or disappoint interests in the Dominions.

Mr. CHURCHILL: On the contrary, if the hon. and gallant Member will read the words of the Finance Bill he will see that the Clause is so drafted as in no way to prevent the, duties being reduced, because the preference only holds good so long as the duties are above the level of the preference.

Captain BENN: If in any given industry the duties were reduced or abolished, the position of the Dominion exporter to this country would thereby he impaired, and if the duty were reduced past the stabilised amount of cash represented in Clause 7—because
the ratio to-day is fixed into a cash sum—severe damage would be done to the importer. In fact, by Clause 7 of this Bill, we are tying the hands of future Parliaments, and, although these preferences do not, except in the case of motor cars, represent anything of any importance to the Dominions, they excite hopes in the first place, and, secondly, so far as they are not a sheer illusion and almost a mockery, they foster the growth of interests there which will fetter our freedom at home. Once the taxpayers of this country understand that all the appeals of the hon. Member for Oldham and of the hon. Member for Ilford cannot affect the Chancellor of the Exchequer, because he is master of his own Budget, there will come a day£long may it be postponed—when people in this country will say that the Imperial tie, instead of being a free Imperial tie, a bond between people of like ideals and like blood, is a fiscal fetter, which they would do well to throw off.

Sir ROBERT HORNE: We have had one of those bright and illuminating speeches from the hon. and gallant Member for Leith (Captain W. Henn) to which the House has been accustomed in connection with these fiscal matters, but the hon. and gallant Member has not really directed attention today to the merits of the question. Although he has indicated, in passing, the formidable principles upon which he thinks that all duties on any kind of manufactures from other countries should be rejected, he has really confined himself to an attack on the consistency of the Chancellor of the Exchequer, and, since my right hon. Friend is very capable of taking care of himself in these matters, I do not propose to rake up the past speeches which he has delivered, although I think it would be very good for all Members of the House if they took the opportunity of reading the discussions that took place in the Imperial Conference of 1907. I think there is still a great deal for us to learn from those Debates, and that much of what was asked for at that time by the Dominions has really proved to be justified in the time that has followed since those discussions were held.
My hon. and gallant Friend has given us to-day a great variety of warnings, such as he has given on many past occasions. He reminds, me very much, on these occasions, of an old practice that used to take place in the Western Highlands of Scotland in days before people became more civilised, and when they were still in a state of rather primitive ignorance of the ways of the world. When there was anything that they disliked, or any person whom they wished to bring to an end, they made a wax figure of him and stuck pins in it, in the belief that in course of time, through this display of animosity and hostility on the part of the pin-pricker, the gentleman concerned would disappear from off the earth. Of course he did not, or, if he did, it was from causes totally different from the particular form of attack that was made by the person who disliked him.
We have had these prognostications from the hon. and gallant Gentleman very many times. We have been told all the terrible things that would occur if anyone dared to put a duty upon anything, and the hon. and gallant Gentleman is, no doubt, very much embarrassed to-day by the fact that these terrible menaces never come to pass. He referred to the question of the Motor Duties, and it is, no doubt, a most difficult point for him at the present time, and, perhaps, even grievous to his feelings, that, instead of the motor car industry of this country being ruined by the 33⅓ per cent, duty which has been put upon imported motor cars, it is going by leaps and bounds to greater prosperity. My hon. and gallant Friend referred to the fact that the Morris prospectus disclosed that in the year in which there was no duty there had been a considerable increase—I think it had been doubled—over the production of the year before; but he very carefully and cautiously told us nothing about what has happened since then. If he looks at the figures for the first four months of the present year, as compared with the first four months of the year in which there was no duty, he will find that there has been an enormous increase in the production of motor cars in this country, and that, instead of prices going up, as was threatened by all the arguments of the Opposition, motor cars are cheaper today than they have ever been before. We were also told, according to the
ordinary rigid Free Trade doctrine, that the result of the imposition of this duty would be to destroy the export trade; and yet the result has been that the export trade in motor cars has been enormously increased.
The explanation is perfectly simple to anyone who understands it. It is this: If you are in a position to increase your production, if you have the certainty of a market which is going to buy your goods, undoubtedly you can produce at an immensely less cost that if you had only a small market; and the result is a complete exhibition of a theory which every man engaged in production understands, namely, that the larger production and cheaper cost enable you to sell at a lower price. That is why to-day we are selling motor cars, not only in this country but abroad, at much lower prices than previously. I am sometimes rather amazed at the kind of things we are told from the Opposition Benches in connection with this matter. We have been constantly treated to the view that any duty puts people who are producing articles within the defences of the duty so much to sleep that immediately terrible results follow in the shape of inefficiency. Has any inefficiency been caused in the motor car trade of this country by reason of the duty? If, on the other hand, one takes a wider view, and looks at what is happening in America, does anyone tell me to-day that America is reduced to inefficiency because of the enormously high tariff that it perpetually maintains as a defence for its own industries Everyone knows to-day that America is the most go-ahead country in the world, and the most efficient in its industries. No doubt there are some industries, like that in which my right hon. Friend the Member for West Swansea (Mr. Runciman) is concerned, in which we are at the present time still pre-eminent, but, taking the business of the country by and large, I do not think anyone can say that America is the least efficient country in the world, or that it does not compare very favourably in efficiency with that with which we conduct our business.
Accordingly, all these old arguments that are used here against duties are contrary to practical experience. Take the case of the Silk Duties. I have made careful inquiries with regard to what is happening in connection with the
Silk Duties, and I find that, as regards raw silk, any change that has taken place in the price is inappreciable, and, with regard to manufactured silk goods, the increase in the price of the articles is really very small indeed compared with the amount of the duty. The result in the case of both these industries is that we are drawing a revenue for the Exchequer; that the amount of business in the country is increasing, and that the articles are really not being raised in price—not at all in the case of motor cars, and not appreciably in the case of silk—while in both these cases we have an enormously increased export trade.
I pass from that topic to the question of Imperial Preference. The hon. and gallant Member dwelt upon the difficulties that would be caused by the fact that we should have to debate in this House questions of our policy towards our Dominions and Colonies, and that we should be, embarrassed by the consideration arising out of Preferences which we hadgranted that the duty
Was increasing the burden upon the British taxpayer. Ever since we have had an Empire, however, we have had perpetual arguments in this House with regard, for example, to the provision of defence for the Empire, Is that a circumstance that has ever diminished our respect for the Empire It certainly did not amongst the leaders of the party opposite when the suggestion was made that the only reason against England having colonies was that she would then be so strong that she would be a menace to the rest of the world. That was the doctrine we got from the Liberal benches many years ago. I do not suppose that anyone, even my hon. and gallant Friend, could be found so bold as to ask—

Captain BENN: It was Disraeli who said that colonies were a menace.

Sir R. HORNE: But there never was a time when he suggested the idea of getting rid of them. On the contrary, in one of the most famous speeches he ever made, in 1872, he urged the development of an Imperial policy such as we are trying to carry out to-day. No one is really going to believe that, because we have to discuss this question of duties, our feelings and our affections for our Dominions and Colonies overseas are going to be diminished. I wish the
hen and gallant Member would face something which he never does face. He indulges in many arguments against our giving preferences to our Dominions on their goods, but is he prepared to face the withdrawal of the preferences which the Colonies and Dominions give to us? That is really the question. Is he prepared to face that withdrawal It would be no use to answer me by quoting something that my right hon. Friend said at the Conference. What I ant presenting now is the argument of practical application at the present time. We have a very difficult position to maintain. Anyone who is engaged in business knows the appalling difficulty of finding markets for our goods. Why are so many people unemployed to-day? It is because we are not getting orders in this country, and that is because the markets which used to take our goods are unable or unwilling to take them. Where are our best markets? It is demonstrable on the figures that what has saved our trade in recent times has been the amount of our manufactures which have been taken by our Colonies and Dominions. I think our exports to-day to the Empire represent 44 per cent. Of all our trade, and if you take manufactured goods alone, which are most important to us, it goes to an even higher figure than that. Does anyone imagine that we could keep these markets without the preferences which are given to us? If anyone thinks so I would beg him to look at what has happened in actual administration. If you take the case of Australia you find that before tile War 51 per cent. of Australian imports were taken from us. During the War, owing to dislocation of trade, we lost that market to some extent, and America and Japan began to export to Australia goods which we had previously sent. In 1919–20 our proportion of the Australian market had decreased to something like 44 per cent., and by the year following to 38 per Cent. Australia then increased our preference to an average level of 12 per cent., and when they still found we were being undercut in the Australian market by the countries which had the benefit of a depreciated exchange they imposed anti-
dumping legislation solely for the purpose of helping the British manufacturer, The result is that Australia is now taking 53 per cent.—she has got back to the old level and gone beyond it—of her imports from the manufacturers of Great Britain.
Is not that worth while What would our trade be to-day without the support of Imperial Preference? Our position could not have been maintained. Is the hon. and gallant Gentleman prepared to sacrifice all that? Could he go to any business community in the country to-day and suggest that a policy should be indulged in which would get rid of all the benefits we enjoy in our Colonial markets. If he is not prepared to go as far as that how does he anticipate keeping these preferences if we are going to give nothing in return? He has been sufficiently warned. If he studies the Colonial Press he will find that there is a very active propaganda in Canada in favour of reducing the preferences to Great Britain and in some cases taking them away altogether if Britain is not going to reciprocate more than it is doing The Prime Minister of Australia. who is well known to be one of the most devoted Imperialists there is in all our Dominions, wrote a very solemn and deliberate article in one of our most important magazines last year in which he disclosed the fact that there were being made to Australia persistently offers from other countries more favourable than anything we give them in the shape of trade, and he said it could not be expected that the Dominions were going to turn deaf ears to these offers for ever if the old country was not going to reciprocate to a greater extent than it has done.

Captain BENN: What did he ask for from the old country?

Sir R. HORNE: He pointed out—the hon. and gallant Gentleman may pour scorn on it, but it is of considerable importance—that the fruit trade could be enormously helped if we could make a market for it which would enable it to develop.

Captain BENN: Meat and wool.

Sir R. HORNE: The hon. and gallant Gentleman cannot have read the article, because he made no such request. The article I referred to was in the
"Nineteenth Century." He made no reference of that, kind at all, but he pointed to the fact that they could take a population of, I think, 750,000 people in the Murray Valley scheme for the purpose of growing fruit, and he said if we could guarantee them or give them such a preference as would induce them to go ahead with that scheme they could take a large number of our people who are now unemployed. There would be two advantages, one, that we should be able to give employment to people who cannot get it at home, and, on the other hand, that you would be constituting a market for your goods in Australia, because every man in Australia takes something like £10 worth of our goods in a year, so you would get both a market for yourself and a relief for your present distress from unemployment. I am never able to understand the kind of policy the hon. and gallant Gentleman constantly urges on the House. Our only future lies in building up the Empire rather than destroying it. Our only chance of restoring our trade is in creating markets in the Empire which will take our goods.

Mr. SHORT: I do not propose to follow the right hon. Gentleman in his discussion of the merits and demerits of Free Trade, Tariff Reform and Colonial Preference. 1 am a firm believer in the Free Trade doctrine and I believe a British Commonwealth based upon freedom and liberty, free from the artificial supports our commerce would derive from tariffs and duties of the character of which the right hon. Gentleman speaks, is more likely to be durable than one based upon materialistic and artificial supports which in my opinion are very much in harmony with the materialism of a soulless commercialism. With reference to the motorcar trade, I well remember the Labour Chancellor of the Exchequer pointing out that that trade was really in its infancy. If it suffered at all it suffered for financial reasons, and he went so far as to suggest that the imposition or withdrawal of a duty would not in itself seriously affect the industry. I think the history of the industry has proved the truth of my right hon. Friend's philosophy. I listened with considerable interest to the speech of the hon. Member for Ilford (Sir F. Wise), who always speaks with great clearness on financial problems. I agree with him in his protest against the
growing increase in expenditure, especially when that expenditure involves enormous economy at the expense of the working classes and heavy burdens on the workers of the country. With regard to the guarantee under the Electricity Bill, I have not as a general rule favoured subsidies. I believe private enterprise should stand upon its own feet. There is no half-way house between private enterprise and the social ownership and control of any particular industry, and if private enterprise cannot support itself and stand upon its own legs, it should make way for a better system which will satisfy the functions of our social life and give the workers a fair, square deal and a reasonable standard of living.
I come to the point made by the hon. Member for Oldham (Mr. Duff Cooper). He was anxious that his party should take upon itself retrenchment. He did not give us a definition of what it meant, but, if it means economy, the policy has indeed been adopted by the Chancellor of the Exchequer, for he has economised in every direction at the expense of the working classes, but certainly not at the expense of the well-to-do, to whom he has given generous remissions of taxation. Then I was interested in the point made by the right hon. Gentleman the Member for West Swansea (Mr. Runciman). His speeches always appeal to my mind, and I have a great deal o4 appreciation for the arguments he advances. He drew a picture of the growing efficiency and capacity and power of our manufacturers, and the readiness with which they can cope with any difficulty. He said we were producing the finest machinery, and when the opportunity came we should be able to do this, that and the other, but he did not explain what all this was worth. When we get rid of all the oratorical niceties, and ask what does this mean to the workers, despite the boundless and illimitable wealth of nature, which has not failed, despite the wonderful skill and development of our mechanical contrivances and machinery, despite our power of coordination and organisation in the realm of industry, what do you provide for the workers at the end of it? A miserable subsistence wage. For the engineer, who produces this wonderful textile machinery, a wage of about £2 17s. a week.
At the very height of your economic and industrial power, before the War, when you had no excuse, when you were indeed the manufacturers for the world, when a great sponge was there to absorb the product of your labour and social activities, you were never able to give the workers more than a mean, despicable and miserable wage. The right hon. Gentleman talks of the growing power of capitalism, of this wonderful knowledge and mechanical skill, but the only remedy you have at this moment in the greatest basic industry of our industrial life, despite your ability, is to increase the hours of the miner and reduce his wages below even the subsistence wages that he now enjoys. I appeal to the House to address itself to these considerations which the man in the street is deeply thinking about. He is not moved by all the high-sounding talk of Imperial Preference, the building of a great British Commonwealth and a great Empire if the building of that Empire means the continuation of the conditions that prevail in our economic life and the law wages and long hours which are now foreshadowed for him in the great basic industry of our country. I have always regarded the Budget as a great instrument, appropriately designed and capably used, for rectifying the inequalities which arise from our economic system, for removing some of the disabilities which fall so heavily upon the working classes, and which create so many disabilities for them as compared with the position of the wealthy classes. I do not say that the Budget in itself can provide for the equitable distribution of the wealth that is produced; that is not within the realm of possibility so far as the Budget is concerned; but it can lessen the evils and mitigate the hardships and provide a greater measure of comfort in the homes of the people, by a rightful and human use of it as a great financial instrument. I have looked for some evidence that that opinion is shared by the Chancellor of the Exchequer, but I have found no evidence to indicate that he thinks that this is an instrument which can be used in that way.
The right hon. Gentleman went into office under most favourable conditions. The international situation was bright, trade was reviving, employ-
ment was increasing, and unemployment was decreasing. In 192.5 he gave £42,000,000 away in remission of Income Tax and Super-tax. [HON. MEMBERS: "£32,000,000!"] Well, £32,000,000. During that year the unemployment figures increased. The number of unemployed increased per month by more than 140,000, as compared with the figures in the period 1919–24. When we look at the prospects at the present time we find that the stability which existed in the latter days of 1924 have been superseded by uncertainty and chaos; the revival of trade has been checked, and in every direction there is a disheartening outlook as far as our trade is concerned. During the period since the War the sacrifices of the workers have been enormous, and altogether out of proportion to the position which they occupy in society and out of proportion to the service they render to the community. Their wages have been reduced in the aggregate from £10,000,000 to £12,000,000 per week, or over £600,000,000 per annum.
The Chancellor of the Exchequer, whose versatility we all admire, whose cleverness we appraise at its proper value, and whom we regard as a great orator, who can come down to the House and make people smile, and cheer up Members on both sides, has not in either of his Budgets given one ounce of benefit to the great mass of workers. He has not tried to correct the disability which has arisen out of our economic system and which has caused the workers to make a sacrifice equivalent to the figures which I have mentioned, by reducing the taxation which falls so heavily upon the workers; whereas the Chancellor of the Exchequer in the Labour Government reduced the indirect taxes upon food, and at one stroke of the pen enabled the working classes to obtain for spending upon the necessary commodities of life something in the region of over £30,000,000 per annum. The Chancellor of the Exchequer called attention to that fact. I have not the exact quotation in my mind, but I remember that when he was speaking on the Widows', Orphans', and Old Age Contributory Pensions Bill, he said that the right bon. Member for Colne Valley (Mr. Snowden) had given to the workers as a result of the reduction of indirect taxation a fund out of which
they would be able to pay for their pensions. Thereupon, the Chancellor of the Exchequer took back not simply with one hand but with two hands what my right hon. Friend the Member for Come Valley had presented to the working classes.
I think my figure of £42,000,000 in remission of Income Tax and Super-tax was correct. While the Chancellor of the Exchequer has given this generous remission to the wealthy people, he has exercised the most outrageous, disgraceful, vicious and vindictive economy upon the working classes. He has robbed the sick and the disabled. He has robbed the naval and military members of the forces of the Crown. He has interfered with National Health Insurance, and he has raided the. Road Fund. Generally speaking, he has attacked the standard of living of the workers in every possible direction. Although we were promised a revival of trade as a result of the reduction of the Income Tax and the Supertax, we have not seen that revival of trade. To knock 6d. off the Income Tax in a Budget of £800,000,000 is totally insufficient to do anything in the direction of a. revival of trade.
With respect to the Betting Duty, I do not claim to be more moral than any other Member of this House. I suppose I am very human and just about as good as anybody else. Having regard to the growth of public opinion, having regard to the results accruing from a long period of education, the public are looking for a higher standard of morality being expressed by our public bodies—I will not say by our public men—and by assemblies such as this. The objection I have to the Betting Duty is that it will make it more difficult because of the imposition of such a tax to remove what everybody admits, in all quarters of the House, to be an evil. I have no doubt that next year when the right hon. Gentleman realises, as he will, the revenue which he expects to get, and possibly more, and some hon. Member suggests that we ought to do away with, the Betting Duty he will reply, "We cannot afford it. We now derive so much revenue from it, and it, is impossible for me to agree to any such proposal as its withdrawal." We shall find year after year greater difficulty, as in the case of
other taxes of a similar character, in securing its removal.
This is a bad Budget. It gives no reduction in food taxes. It makes little or no effort to lessen the poverty of the masses of the people. It confers no real advantage upon the workers. While it increases the burden on the workers, it gives generous remissions of taxation and exceptional gifts to the wealthy. I shall go into the Lobby freely against this Budget, believing that it is an instrument which is calculated to render no real service to the great masses of the community.

Sir JOHN MARRIOTT: With all due respect to the hon. Member for Wednesbury (Mr. Short), I do not propose to follow him in his very interesting disquisition as to the distribution of financial burdens between different classes of the community. I may say something later with regard to his concluding words. As I see the right hon. Member for West Swansea (Mr. Runciman) in his place, I should like to say with what complete agreement I listened to the very interesting speech which he delivered. Almost every argument which fell from his hips found an echo in my mind. I cannot say the same in regard to the speech of the hon. Member for West Leicester (Mr. Pethick-Lawrence), who seconded the Motion for the rejection of the Bill. The hon. Member for West Leicester put before the House an argument which seemed to me amazing from every point of view. He made great play with what he described as communal activities and communal expenditure, and told the House that of the large sum in the Budget, £824,000,000—I hope I do not misquote him and I am sorry he is not in the House—which we have to raise this year, only about £400,000,000, or less than half, I think he said, was in any sense communal expenditure. He arrived at that amazing conclusion by excluding from communal expenditure two specific items which I believe are responsible for over £400,000,000; one was the Debt charge, the charge for interest on the Debt, and the other, which I think he put at £122,000,000, was for pensions.
Does the hon. Member mean to tell the House or the country that the Debt charge, a charge which was for the most
part incurred in defending this country during the Great War, is not communal expenditure of the most obvious kind? What possible interest could there be more communal, more common to the whole community, than that of defending the country in a great war such as that from which we have emerged. Moreover, I would like to hear of the hon. Member going on to a platform and telling the people of this country that the charge of £122,000,000 for pensions cannot be regarded as communal expenditure. That is a debt which we owe, for the most part to those men who fought for us and the country in the Great War. To exclude items of that kind from communal expenditure and to reduce the amount of expenditure on communal purposes to that extent, seems to me one of the most amazing arguments to which I have ever listened in this House.
I am very much afraid, from the discussions to which we have listened this afternoon and from the long discussions which we have had on this Bill, that the Finance Bill, to which I hope we shall put the final touch to-night, is not one, I frankly admit, in regard to which anyone can feel a very large measure of enthusiasm or even of special satisfaction. If I have to make one or two rather critical observations, I should like at the outset to say that in the framing of this Finance Bill, the Chancellor of the Exchequer seems to me to have exhibited conspicuous courage and resource, just as in the conduct of the Bill he has exhibited his characteristic courtesy in Debate. It is a peculiarity of the finance scheme of the present year that it has been presented to the House in two instalments, or, as Lord Dundreary said, in two compartments. First, the Chancellor of the Exchequer unfolded to us the expenditure side of the account in connection with the Economy and Miscellaneous Provisions Act. Having expounded that expenditure in a very able speech, he left the detailed defence of that very contentious Measure mainly in the hands of two competent colleagues. I am not proposing to discuss the Economy and Miscellaneous Provisions Act to-night, and I take it I should not be in order in doing
so, but I think I am entitled to make a passing reference to it, because it really forms the basis of the Bill which we are now discussing, and, in making that passing reference, I should like to associate myself entirely with what has been said by the hon. Member for Ilford (Sir F. Wise) in regard to the expenditure side of this account.
It is my first, and perhaps my main, objection to the Bill we are now considering that it is calculated and intended to raise far too much money. A year ago the Chancellor of the Exchequer was apologising to this House for asking for a, Vote of £799,000,000, and here he is this year, with a falling revenue and a, still more depressed trade, unblushingly, almost with effrontery, asking the House for £824,000,000. In my judgment, this is a very great deal more than the country in the present circumstances can afford. I am not thinking of the individual taxpayer; what I am thinking of is the aggregate trade of the country. Hon. Members opposite are very fond of thinking of taxation in terms of the individual taxpayer; that is a common practice with members of the Opposition. I de not for a moment suggest that it is an unnatural way of looking at taxation, but I say that when we are considering the finance scheme of the year it is a fallacious and misleading way of looking at the matter. I want to look at it, not in terms of the individual taxpayer, but in terms of the aggregate industry and trade of the country, and from that point of view a bill of £824,000,000 is a great deal more than we can afford at the present time.
I observe that more than one speaker on the benches opposite was inclined to suggest that we were taking too little from the direct taxpayers of the country. I am not going into the whole of that sum; I merely take the figure estimated from Income Tax and Super-tax, and I find that a sum of nearly £320,000,000 is to be taken from the Income Tax and Super-tax payers of this country. The point I desire to make is this: that, to a very large extent, that sum of £320,000,000 is a deduction from, at any rate, potential capital which, under ordinary circumstances, ought to flow hack into industry. Everybody knows that capital is dear to-day. It is dear because it is scarce, like other commodities which are dear because they are
scarce, and it is scarce because the flow of new capital into the capital fund is relatively small. Hon. Members opposite sometimes point to the strength of gilt-edged securities and to the fact that when there is a new issue of capital for some attractive investment it is sometimes considerably over-subscribed. Yes; but looking at it from the point of view to which I want to draw the attention of the House, I regard the strength of gilt-edged securities and this large inflow into apparently profitable investments as (being a sinister sign of the trade and commerce of the country at the present time. And for this reason. It is notorious that gilt-edged securities are high at times when it is not remunerative to put money back into your own business. From that point of view it is a sinister sign.
There is only one proposal in the whole finance scheme of the year on which I look with unmingled satisfaction, and that is the provision which in all our difficulties the Chancellor of the Exchequer has seen fit to make for the reduction of Debt. The House must have listened, and I am sure foreign observers must have read, with admiration and pride to the recital by the Chancellor of the Exchequer of the recent history of Debt redemption in this country. We ourselves may well stand amazed, as I believe the financiers of the world stand amazed, at the magnitude of the effort this country has made since the conclusion of the Great War. That effort has not been made without great sacrifice on the part of individuals, and I am quite prepared, like the hon. Member for Ilford, to admit that it has not been made without some sacrifice on the part of trade and industry. It is a magnificent and heroic effort. It may be asked, is it good business? I think it is, and for the reason which was admirably given by the right hon. Gentleman the Member for Swansea. I hold it to be of supreme importance that at almost any sacrifice we must maintain the credit of this country against the redemption of maturities which will become payable within the next few years. Within three years there will be Debt maturities amounting to nearly £1,000,000,000, and on the top of that, from 1929 onwards, there will be a sum of £2,000,000,000 of redeemable Debt.
It is obvious that these maturities, actual and potential, will put into the
hands of any Chancellor of the Exchequer a very big opportunity, but the question of supreme moment to this country is whether we shall he able to seize the opportunity and be able to do what the right hon. Gentleman the Member for Swansea pointed out as so eminently desirable, get our Debt on a 4 per cent. or even a 4£ per cent. basis The advantage of this to the community and to trade and industry the right hon. Gentleman made abundantly clear. There is only one possible way in which we can take advantage of this great opportunity, and that is by such a maintenance or improvement of national credit as will permit of redemption on favourable terms. At the moment I am afraid the omens are by no means too favourable. It is true that in the last seven years the Floating Debt has been reduced by the enormous sum of £700,000,000, a truly prodigous achievement. It is also true that since 1920 there has been a reduction in debt interest of no less than £47,000,000 a year. These are figures which may well repay us for long years of self-denial and high taxation. They are figures which may well excite the admiration and envy of some of our neighbours. Nevertheless, it is a lamentable fact that our credit is less good by something between a half per cent. and one per cent.—I am sorry to have to confess it—than when the present Government, took office. Therefore, I should like the Government to take heed of the suggestion made by the hon. Member for Ilford, of suspending the Trustee Act as regards Dominion loans for a limited period of three years. That would carry us to the end of the period of compulsory maturities, and by conserving our capital resources for home consumption would enable us to convert on terms more favourable than seems at the present. moment to be possible.
I am aware of the great complexities of this problem, and I am still more conscious of the argumente which on broad Imperial grounds may be advanced in a contrary direction. But I hold so strongly, with the hon. Member for Ilford, and the right hon. Member for Swansea, that at the moment it is a matter of supreme importance to maintain the credit of this country, in view of these early debt maturities, that I should be prepared to make some small and temporary sacrifice of other princi-
pies which I have long held dear. I only want to add a very few words. Assuming that we have to raise this gigantic aggregate sum; assuming the necessity—which I do not assume—for raising this vast amount of revenue, I think there is not a great deal to be said against the methods by which it is proposed to raise it. It is here, I think, that the Chancellor of the Exchequer has shown his courage and his resource. I must frankly say that I do not think much of his essay in protection. I do not think he thinks much of it either, for I do not remember in the whole course of these prolonged Debates that we have heard one word from him in defence of the duty, for example, on wrapping paper. I think he has been rather conspicuous by his absence from the House when that matter was debated. I apologise to him if I am in error—

Mr. CHURCHILL: My- hon. Friend will understand that I cannot allow that observation to pass. I take full responsibility for the duty, but I left the defence of it, naturally and necessarily, to my right hon. Friend the President of the Board of Trade, because it arises under the Safeguarding of Industries procedure, which is directed from the Board of Trade. I take the fullest responsibility however for the duty, and I am entirely in agreement with the President of the Board of Trade on that subject as well as with the principle of the safeguarding policy as defined by the Government last year.

Sir J. MARRIOTT: Of course, I never suggested that the Chancellor of the Exchequer would not accept responsibility for his own Budget. I do not suggest that for a, moment. All I said, and I am not aware that he has denied it, is that as a matter of fact he left the defence of that very questionable proposal, the apology for it—it needed an apology—to one of the more prominent of his Protectionist colleagues in the Cabinet. If my right hon. Friend had been present during those Debates, he would have heard a good deal of plain speaking and he would have witnessed some cross-voting from among the most loyal of the supporters of the Government. It seems to me that it is pertinent to ask, What you are going to get out of this petty essay in Protection? You are going to get at any rate an infinitesimal amount of revenue. We shall be told, if
we are told anything, that the revenue is not the object for which the duty has been imposed. No doubt. If it were the object, it would be very poorly attained by the revenue which is anticipated. Then we are going to get, if no revenue or no revenue to speak of, Protection for, what is it? For 7,000 persons engaged in the wrapping paper industry. Yes, but you are going to get that petty revenue, and that petty measure of Protection at the risk of appreciable injury to tens of thousands of workpeople engaged in other industries which are in part at least dependent upon that of wrapping paper. But I have had more than one opportunity through your courtesy, Mr. Speaker, or that of the Chairman, of speaking on this question on oilier occasions, and I do not want to labour it again, though I do not pretend to be in love with that portion of the Finance Bill. It. was obvious, however, that the Chancellor of the Exchequer was bound to look, in the financial circumstances of this year, for new sources of revenue. As I have done before, I would like to congratulate him on the courage with which he has grasped the very thorny nettle of the Betting Duty. It seems to me that if you are seeking for new sources of revenue, it is merely commonsense to try to avoid any impost which would injuriously affect industry or commerce. Does anyone pretend that the Betting Duty is really going to injure industry or commerce? In the second place, it is important that whatever tax you impose should be fiscally remunerative. I believe that this Betting Duty will prove to be very remunerative in a fiscal sense. It is opposed, I am aware, by a large number of people for whose opinion I have the greatest possible respect, from what is called the moral point of view. I must confess that I am amazed at that argument, and for this reason: No one, of course, can for one moment suggest that in putting a tax on betting you are putting a tax on a necessary of life. I should have thought that right hon. and hon. Gentlemen opposite would at least have been glad that the necessaries of life were avoided in new taxation. As to the moral side of the question—well, I do not pose as having a great opinion on these questions, but I wish to say this: Assuming gambling and betting to be the great social evils
that they are described as being—I am not for one moment denying that—I put it to those who oppose this tax, have they ever in their lives heard of the imposition of a tax which would increase the consumption of the commodity which is being taxed?
Here, if you like, is an admitted social evil. You are going to impose a tax upon it, a tax which, I believe, will be fiscally remunerative, and it passes my comprehension to know how by imposing that tax you can expect that the evil will he otherwise than diminished in the process of taxation. On that ground, if on no other, I shall give to that tax my cordial support. Let me say this in conclusion. Little as I like the expenditure which is implied in this Finance Bill, and completely as I agree on this point with my hon. Friend the Member far Ilford, and cordially as I support the proposals which have been put forward in the very admirable report of the Estimates Committee—a Report which I hope will receive, as it deserves, the very serious consideration of this House—yet, taking this serious view in regard to the expenditure side of the account, I hold that, assuming that that expenditure had to he met, my right hon. Friend the Chancellor of the Exchequer has addressed himself with courage and with resource to the task of raising the necessary money.

Mr. RADFORD: I propose to confine my remarks to one matter only, and that is the Super-tax provisions of the Bill. Clause 19, by means of references to relevant sections of the Finance Acts of 1918 and 1920, provides that Super-tax shall be charged in respect of the income of any individual, the total of which from all sources exceeds £2,000. That appears to be a plain and unequivocal statement, apparently implying that all persons who are fortunate enough to have incomes of over £2,000 shall bear additional taxation, and, obviously, that those with equal incomes will bear an equal amount of tax. Unfortunately, such is very far from being the case. On the Second reading of this Bill and during the Committee stage, I intervened to draw the attention of the Chancellor of the Exchequer and of the Financial Secretary to the Treasury to certain grave weaknesses in our financial law relative to Super-tax —weaknesses which were resulting in
many very large incomes escaping Supertax altogether. My right hon. Friend the Chancellor of the Exchequer was, I think, not present on that occasion, but he may possibly have heard from his colleague the purport of my remarks. I actually put down an Amendment during the Committee stage with a view of tightening up the law and preventing these serious leakages, but unfortunately, as my Amendment naturally involved certain persons who were evading Super-tax becoming liable for it, it was held to be an imposing of a further charge and was ruled out of order. But I still hoped that on the Report stage the Government would have taken some action to stop these abuses. I have been exceedingly disappointed to find that they have done nothing whatever.
Any case that I made out, or endeavoured to make out, during the Committee stage, has been materially strengthened by a further case in the Law Courts within the last fortnight. It is a case of a most astounding nature of which with the permission of the House, I will give short details later. Right from the outset, when Super-tax was first imposed in the Budget of 1909, the dice were always loaded in favour of those persons whose incomes were derived from the dividends of limited liability companies. When I say "loaded" I mean not intentionally loaded, but unintentionally loaded. I will give one example of the difference of the positions of two equally wealthy men when Super-tax was first imposed in the Budget of 1909. Each of these two men owned a fine old business that may have been established for generations in their family. "A" owned his business as a private firm. "B" owned his business by means of a limited company, holding the whole of the shares of the company. Each of the businesses made a uniform profit of £20,000 a year. Each of these two men, in addition, possessed investments and other sources of income bringing him in £5,000 a year. It is clear to every Member of the House that these were equally wealthy men, that each of them possessed a potential income of £25,000 a year, if they chose in the one case to draw it out of the business and in the other to have dividends declared by the limited company and paid to the shareholder. But the two men lived on the £5,000 a year from other sources. The first man allowed his capital to be added
to year after year in the private firm, by leaving his profit undrawn. In the same way, the limited company proprietor lived within the £5,000 that he drew from other sources, and he allowed the company's profits to accumulate in the coffers of the company.
Obviously, they were equally wealthy men. But for Super-tax calculations the income of the man who owned the private concern was £25,000, namely, £20,000 profits from the business, and £5,000 income from investments. The income of the other man who owned the whole of the shares of the limited company, making identical profits, for Super-tax purposes was calculated as £5,000 only. As a matter of fact, at that date he escaped Super-tax entirely. I submit that the second man, the proprietor of the shares of the limited company, was saving up money for himself to exactly the same extent—allowing it to accumulate in the hands of the company whose shares he owned—as the man who allowed it to remain in the business of which he was the proprietor. At the outset that was the position, without any step having been taken by the man who was the owner of the limited company to reduce or avoid his liability to Super-tax. He had formed his business into a limited company years previously, and he was in that fortunate position automatically. It was not long before people began to realise what an advantage it was, if they owned a business or investments or estates, to have them held by a limited company, of which they could in turn hold the shares. The injustice from the outset to professional men and highly salaried officials was also obvious, because they were charged Super-tax on the full amount of their annual incomes, whereas the company men were escaping in the way I have shown.
To begin with, no doubt, it was merely regarded as a sort of fortunate coincidence that those who owned their businesses in the form of companies were escaping Super-tax, although others had to pay. But gradually the thing developed. Not only were businesses transformed into limited companies, but companies were formed to take over the investments and landed estates of other taxpayers. Then the next difficulty came. How could these companies hand
over to the proprietor the cash that they had accumulated without making the proprietor liable to Super-tax when the
cash was handed over? A solution of this difficulty was found. The issue of bonus shares out of profits was held by the Legislature not to make the recipient of those shares liable to Super-tax on the amount thereof. It even went further, and it was found that the issue of bonus debenture to the shareholders of a company did not make the recipients thereof liable to Super-tax. Once the shares or debentures as the case may be found their way into the hands of the proprietor, then he could turn them into cash, either by the sale of the shares issued to him as bonus shares, or the company could pass a resolution for the reduction of its capital, and the repayment of a certain amount to the shareholders, and although this was in fact cash that had accumulated in the form of profits, it was not liable to be included in their Super-tax returns.
7.0. P.M.
Since I spoke on the Committee stage I have seen one case in the newspapers in regard to this question of bonus shares. It was headed, "A Prosperous Company," and was an account of an application to the Court to sanction the repayment to the shareholders of £25,000 out of the £30,000 issued share capital of a company. Counsel for the company who applied to the Court stated that the company w as formed about 1910 and that it had had a very successful career. Its funds were now greater than were needed for the business, and it was proposed to repay to the shareholders £25,000 in cash and reduce the capital from £30,000 to £5,000. As all liabilities had been met fully up to date, the Court made the necessary order. It is perfectly plain that the company had gradually accumulated undistributed profits and issued bonus shares to the shareholders until the initial £5,000 capital had grown to £30,000, and this £25,000 of accumulated profits was handed to the proprietor in the form of repayment of capital, and was absolutely exempt from any liability to pay Supertax.
Another case which I saw in the papers —and it is inconceivable to me that my right hon. Friends and their advisers in the Inland Revenue Department have not seen it also—was a case a few months ago where a company was formed to take over
from a certain individual the whole of his estate and investments. The capital was somewhere in the neighbourhood of £1,000,000, but the purchase price to be paid to him for this estate and investments was to be paid in a most extraordinary manner, namely, in cash in 50 half-yearly instalments of a given amount, without interest. The transaction appeared so peculiar that I went to the trouble of working it out to see what was the meaning of it. The reason was clear. For the purpose of this case, whether it was £1,000,000 or £2,000,000 is immaterial, and we will take the figure as being £1,000,000. This man was in possession of a million pounds' worth of estate and investments, bringing him in an income of, say, £50,000 a year. He agreed to sell this million pounds' worth of estate and investments to the limited company of which he was to be the shareholder for £1,000,000, which was to be paid to him by the company in 50 half-yearly instalments of £20,000 each.
Before he did this he was in receipt of an income of £50,000 a year, and out of this income he had to pay 45. in the £ in Income Tax, which amounted to £10,000. He bad also to pay Supertax based on £50,000, which meant approximately, but not quite, £15,000. In other words, his total liability for Income Tax and Super-tax, out of the £50.000 which he was receiving yearly, would be just under £25,000. What was his purpose in transferring this estate and investments to the company? He transfers them to the company, and the company has to pay Income Tax just as the old proprietor had, amounting to £10,000 a year. That leaves the company with £40,000, but Super-tax, as distinct from Income Tax, is a personal tax, Income Tax being a tax on the source of income and Super-tax a personal tax. Therefore the company was not liable to Super-tax and had £40,000 a year left in its coffers.
By means of this deferred payment system which he had arranged with the company, the whole of that £40,000 a year, which was going to be paid to him in half-yearly instalments of £20,000, would not be liable to a penny-piece of Super-tax. For 25 years that man would receive the £40,000 a year which he would have received when he held the investments himself, but out
of which he would have had to pay £14,000 or £15,000 Super-tax, and he would thus receive the whole of that money free from Super-tax liability.
Things went on like this until 1922, when the, Inland Revenue authorities began to become alive to some of the things which were happening. Here 1 would like to say, in order to make my position perfectly plain in this matter, that after I spoke in the Committee stage I was asked by one hon. Member: "Who constituted you an agent for the tax gatherer?" I said I was not acting as agent for the tax gatherer, but for the other taxpayers, because the avoidance by certain individuals of their due proportion of the taxes of the country puts a heavier burden on those who honourably meet their obligations.
When the right hon. Gentleman the Member for Hillhead (Sir R. Home) was Chancellor of the Exchequer in 1922 he introduced in his Budget of that year a certain Clause, Section 21, as it has now become, of the Finance Act, 1922, by which he hoped to deal effectively with this thing, which was rapidly becoming an evil. When he introduced that Budget, and referring particularly to these cases, he used the following words:
I wish also to direct the attention of the Committee to certain instances of legal avoidance of Income Tax and Supertax which have recently become so prevalent as to produce, unless they are corrected, startling inequalities in the incidence of taxation as between different taxpayers." [OFFICIAL REPORT, 1st May, 1922; Vol. 153, col. 1033.]
I will not weary the House with reading the Section referred to, but I will briefly give the gist. This Section 21 provides that where any company to which the Act applies had not distributed out of its profits in any year a reasonable proportion of such profits by way of dividends, the Inland Revenue authorities were to have the right to treat the shareholders Who were entitled to such profits had they been distributed, as having received such dividends and to assess them for Super-tax accordingly. This was unfortunately qualified in such a drastic manner as to make the Section practically inoperative. Further on in the Section it was provided that it only applied to any company which (a) has since the 5th day of April, 1914, been registered under the Companies Acts, and (b) in which the
number of shareholders was not more than 50, and (c) which had not issued any of its shares as the result of a public invitation to subscribe for shares, and (d) which was under the control of not more than five persons.
I would first draw attention to the fact that the word "and" was inserted after each of these provisos and therefore no company would come under the provisions of that Section 21 unless each of these four provisos had been complied with. In other words any company which desired to keep clear of the provisions of this Section 21—and obviously every company owned by men liable to Super-tax would so desire—had only got to keep clear of a single one of these provisos to escape altogether. The first necessity was that the company had to be formed prior to the 5th day of April, 1914. Since this was in the year 1922 the legislature undoubtedly thought they had amply protected themselves in making it eight years previously. But they never protected themselves in the least against the business which has grown up in the buying of derelict companies.
In the Committee stage I read out one of these advertisements. It was very short, and perhaps I might read it again. It was in January of 1926, only a few months ago, and runs as follows:
Advertiser desires to purchase the registration of a company formed prior to the 5th April, 1914. Memorandum must have wide powers as to holding and dealing in real and personal estate.—Apply Box .565, the Publishers of The Accountant.' London.
a very reputable professional newspaper for which I have a particular regard. That was the first step. If they can manage to get hold of a company formed prior to the 5th of April, 1914, and transfer either their business or investments to that particular company, then they can be exempt from Super-tax. As the law stands now any millionaire, if he takes the necessary steps can be exempt from Super-tax. I say it is an absolute outrage that in our financial law that should be the position. But suppose anyone was unable to get hold of a derelict company formed prior to the 5th of April, 1914, what was the second necessity? It was that the number of shareholders should not be more than 50. You might say that that naturally takes it
out of the category of any private company which would never have so many shareholders. It is quite true that a man does not wish to have other shareholders holding shares which rank with his own, but he does not mind if he is going to save thousands of pounds a year in Super-tax, creating some preference shares and giving 10 £1 preference shares each to 50 other persons. I can assure the House that if anyone came and offered me, if he were a man of repute who obviously was the proprietor of what he was offering me, 10 fully paid preference shares in his company I should thank him, and I think many hon. Members would do the same. I believe that the second proviso is such an easy one to get over that there is no need to deal with the others.
The third proviso was that which says that no invitation should have been made to the public to subscribe for shares. That was another necessity. I saw a case, also a few months or a year ago, and it was after seeing that case that
I first put a question to the Chancellor of the Exchequer asking him whether his attention had been drawn to these limited companies taking over the assets of private persons. in this particular case there was a company with a capital of something like £2,000,000 in which the father and son were to be governing directors for life and hold all the ordinary shares. Simultaneously, they made what was, comparatively speaking, a trifling offer to the public of some 5,000 preference shares. When I saw that advertisement of the issue of 5,000 preference shares by a company with £2,000,000 capital, it was that which really started me investigating these eases, to see what was the reason for this, when the cost of advertising, etc., would nearly swallow up the £5,000.The reason was made plain. Apparently, they had failed to get hold of a, derelict company and had not thought of giving away shares -Co 50 different people, but by offering these 5,000 £1 shares to the public they took their company out of the operation of this section entirely, and were able to go on exempt from Supertax if the company did not pay cash dividends.
Since the Report stage there has been another case decided which I referred to earlier in my speech. This is a case of
some men at Manchester who are the governing directors of a well-known firm in the iron and steel trade, Messrs. Hall and Pickles, Limited. These gentlemen had entire control of the business, and between December, 1916, and December. 1919, they paid no dividends at all, but they made loans to themselves out of the company's funds to the amount of £283,000. They went further. They did not take these loans and merely hold the money, but they themselves passed the necessary resolutions as directors or as shareholders to write off these debts as irrecoverable. This was too much even for the Inland Revenue authorities, and they took proceedings against these two gentlemen to make them account for Super-tax on this money. There Was no question of Income Tax, because Hall and Pickles, Limited, would be liable for Income Tax on its profits, including this money which had been paid out, but there was the question of Super-tax on the £283,000 which these men had drawn, calling it a loan and which had been written off by the company. Mr. Justice Rowlatt in the Court of First Instance decided in favour of the two Messrs. Hall—two brothers—and the Commissioners of Inland Revenue took the case to the Court of Appeal, and in the Court of Appeal a fortnight ago, judgment. was given against the Commissioners of Inland Revenue. These people appear to have got away with their £283,000 free of Super-tax. If I was unable to convince the Financial Secretary to the Treasury, when I spoke on this matter during the Committee stage, I submit, in view of the further cases which are coming to light, that it is inconceivable that he, or the Chancellor of the Exchequer, can continue to treat the matter as they have been treating it. The Financial Secretary to the Treasury, after I had spoken on the previous occasion, said:
The Inland Revenue authorities and the Treasury are continually trying to strengthen existing legislation if experience shows that it is not proving completely satisfactory for its purpose. So with this particular Clause. I am not able for that very reason to give a definite pledge as to what we will do."—[OFFICIAL REPORT, 21st June, 1926; Vol. 197, col. 149.]
We are told they are always strengthening the legislation to prevent such evasion, but 1922 was the last occasion on which any effort was made to deal with this matter. We had a to-tally weak and
inadequate provision in. 1922 and, for four years since then, these people who are enterprising enough—or crooked enough —to want to avoid Super-tax liabilities which the bulk of the people of the country honourably meet, are being allowed to escape. I submit this is a violation of our British sense of equity and fair play. As I say, the bulk of the people in this country with over £2,000 a year, honourably pay the Super-tax to which they are justly liable, and it is wrong that these people—many of them among the wealthiest—should be allowed to get away without paying their due liability, thus throwing a heavier load on to the other Super-tax and Income Tax payers.

Mr. LEES-SMITH: The hon. Member for South Salford (Mr. Radford) will not expect me to follow him into the very intricate details which he has laid before the House. I will only say that he appears to have made a case into which the Treasury ought to inquire. Indeed, I had some notion that on the question of the purchase of derelict companies there was already some committee at the Treasury investigating as to whether that particular loop-hole could not be stopped up. In closing the Debate from this side of the House, the most suitable thing I can do is to sum up the real and the deep differences which separate us from other parties in this house and which lie behind all the detailed discussions which have occupied us on this Finance Bill, for, I think, 13 Parliamentary days. For my purpose, the speech delivered by the hon. Member for Ilford (Sir F. Wise) will form a, good text, because he laid down certain general principles into which I should like to inquire. The hon. Member has stated what, I think, is the outstanding financial doctrine which appears in every important speech from the Conservative benches. That doctrine is that owing to our rate of expenditure the scale of direct taxation is now dangerously high, and that the high level of. Income Tax and Super-tax is one of the most formidable burdens which industry, at this moment, has to bear and is largely responsible for our trade stagnation and unemployment. That doctrine dominates the Budget of every Conservative Chancellor of the Exchequer.
This Budget is really an interim Budget. It was preceded last year by reductions of Income Tax and Supertax amounting to over £30,000,000, and the Chancellor of the Exchequer indicated in his Budget speech that it was intended, in favourable circumstances, to lead up to a further reduction next year. Here is the first main difference between us. We opposed those reductions of Income Tax and Super-tax last year. We shall oppose them if they are repeated next year, and, if the predictions of the right hon. Gentleman the Member for West Swansea (Mr. Runciman) are correct, and if, next year, we are faced with the necessity for increased taxation, then our attitude will be that that increase of taxation must come from direct taxation alone, and that it must not be spread—as the Chancellor of the Exchequer has stated it will be spread—so as to include indirect taxation on the food and the necessities of life of the people. That is the clear difference between us in principle, and I wish to indicate what are not so much the socialistic as the purely financial arguments on which we base our opinion.
The hon. Member for Ilford read some of the balance-sheets issued by John Brown and Company, the Ebbw Vale Iron and Steel Company, and, I think, Armstrong-Whitworth's — the balance-sheets of trade in the unsheltered industries—and he made a point which the Chancellor of the Exchequer
made two or three weeks ago. The hon. Member and the right hon. Gentleman pointed out that if we look at the general position of our unemployment and trade depression, at the moment, the situation is rather surprising. The bulk of our industry—to use the words of the Chancellor of the Exchequer—is in normal and healthy operation and the unemployment and stagnation are concentrated in a special group of trades. These are the unsheltered trades, the trades which depend for their prosperity on our export markets, the iron and steel, engineering, cotton, coal, and shipbuilding trades, which depend for their success upon being able to keep down their prices so as to hold their own, unprotected and unsheltered, against compe-
tition in foreign markets. It is the position of these trades which is half the problem, and if you wish to secure that increased production to which the right hon. Gentleman the Member for West Swansea referred, it must be secured by assisting this special group of export trades.
All that is quite true, but what is the conclusion to which it leads? What ought the Chancellor of the Exchequer to do? We contend that, under these conditions, the position of those export trades where unemployment is concentrated, ought to occupy first place in the mind of the Chancellor of the Exchequer. If he follows that policy, which arises from his own statement, where does it lead? Let hon. Members read the report of the inquiry of the joint committee of workers and masters into the position of the shipbuilding industry. It is a unanimous report, and there is a section dealing with what the Chancellor of the Exchequer can do for them. What do they ask for? They ask for Budgets which will reduce their standing charges and enable them to lower their prices, and compete on more favourable terms with their rivals in foreign markets. When they refer to standing charges, they particularly ask for Budgets which would lead to a reduction in rates and in insurance contributions, these being the main standing charges which the Chancellor of the Exchequer can influence. What is the Chancellor of the Exchequer's reply? His reply and the reply of the Conservative party is the reduction of Income Tax and Super-tax.
That is no help at all to these trades. They are not paying income Tax and Super-tax. They are making losses. The reduction of Income Tax and Supertax assists those who are living on debentures or rents or mortgages or War Loans or inherited wealth, but it is of no assistance to those trades where the heart of our industrial difficulty is to be found. Income Tax and Super-tax do not increase standing charges, because standing charges are deducted before Income Tax is paid. Therefore, our first criticism of the policy for which the Conservative party stand is that, from the point of view of the needs of the country, it is at this moment headed in
an absolutely wrong direction. These
export trades are the trades to which assistance should be given, but the Chancellor of the Exchequer gives them no assistance. He is their greatest enemy; he is the greatest pest and nuisance with which they have to deal; he does not help them in their difficulties, but adds to their difficulties by increasing their standing charges, and he does so, in order that he may reduce the Income Tax and Super-tax by which he gives the greatest assistance to those sections of the State who are already enjoying the greatest share of the national wealth.
We should, if we had control of affairs, put reduction of Income Tax and Super-tax in a very secondary position compared with that which it occupies in the programme of the Conservative Government. Some day, if circumstances were favourable, we might consider a reduction, but here again I would point out that there is the greatest difference between how we should deal with a reduction of Income Tax and Super-tax and the manner in which it has been dealt with up to the present. I feel confident that we should never again undertake a general, all-round reduction, say, of Income Tax without taking into account the sources from which the income was derived. We draw a very sharp distinction between income which comes from earnings and represents effort and income which comes from inherited wealth, investments, or other forms, so to speak, of inactive ownership, and in our view reduction under present conditions should be confined to earned income, which represents the vital and the creative elements of production, while unearned income, which, so to speak, comes to one in one's sleep, without any present effort on one's part—

Mr. MACQUISTEN: There is a vast difference.

Mr. LEES-SMITH: There is a distinction between the two, and we say that the unearned income can wait until far different conditions may have arisen. We justify this attitude on financial grounds. It appears to me that this present system of a general, all-round, indiscriminate reduction really defeats the very reason which Conservative Chancellors of the Exchequer always advance for a reduction of Income Tax. What is the argument? It has been used over and over again this afternoon. It is that
a reduction of Income Tax stimulates industry and enterprise, and thus helps a revival of industry and trade. But how does it stimulate industry or enterprise to reduce the Income Tax of those who are living comfortably on inherited wealth, or debentures, or mortgages, or War loans? Sir Josiah Stamp has pointed, out that when you reduce the Income Tax on the present general, all-round lines, at the most, only one-sixth of the reduction goes to those directors of industry who can be held to be stimulated by that reduction, and that five-sixths of it is dissipated amongst the interest-receiving, bond-holding classes, which simply receive the results of the exertions of others without being under the necessity of contributing any exertions of their own. That, I believe, is one of the reasons why all these reductions in Income Tax and Super-tax in the last few years have been a failure, and why at the end of it all, a trade revival has never taken place.
There is another reason for this policy, which I do not think has been brought out up to the present, and it is this: The Chancellor of the Exchequer, in a Debate about a week ago, argued that the workers of this country were really better off now than they were five or six years ago, because there had been a reduction of prices since 1920, and the level of prices was now only about half what it was at that date. There may have been a reduction of prices, but the wages of the workers have in that same interval fallen by £600,000,000 a year, or a little more, and, therefore, any reduction of prices has been more than counteracted by that corresponding movement of wages. But when you come to the classes with which we are dealing, they have had the advantage of the reduction of prices without any corresponding reduction of their incomes. When you come to those who are living on inherited wealth, or debentures, or mortgages, or War Loans—

Sir ALEXANDER SPROT: Savings!

Mr. LEES-SMITH: Yes, or savings—I am stating the difference between their position and that of the workers—they are still receiving exactly the same, their 5 per cent. or 6 per cent. or 8 per cent. which they contracted for, as in 1920, but owing to the reduction of prices, the sum is worth twice as much. Now, in
view of that fact, look at the policy of Conservative Governments, which is to make their main object the reduction of Income Tax and Super-tax, of the benefits of which five-sixths will go to this very class whose real incomes are doubled, whose share of the national wealth is doubled, and the cost of maintaining whom to the community has doubled within the last six years. Sa that, from the purely financial point of view, our criticism of the whole principle of Conservative finance is that it differentiates against earned incomes, representing effort and creative energy, in favour of unearned incomes, representing inherited wealth and passive, inactive ownership.
Our next main criticism, which I will not expand for lack of time, is that, at the same time that it does this, it makes another differentiation, and that is a differentiation between those whose position is easy and comfortable and wealthy and those who are struggling to make both ends meet. We are still paying for the War, and, according to the sinking fund policy of the Government, we shall continue paying for it for another 150 years; and behind all our Debates, not only on finance, but on other subjects, the great unsettled question which is being fought out is whether the War is going to be paid for by the wealthy or by the poor. The general policy of the Conservative party is to reduce the Income Tax and the Super-tax, that is, to reduce the payments of the wealthy, and in order to do that they have struck 100,000 men off the unemployment register, they have increased the deductions from wages for insurance purposes, they have cut down the assistance that the workers can receive in times of sickness, weakness, and distress, they are taking steps to stunt the possibilities of developing their mental powers, and they are destroying the hopes of a new social order which were held out to our young men when they went out to the War. We have fought that policy at every stage, because our view is that the first duty of a Chancellor of the Exchequer, on account of which the wealthy classes ought to be willing to stand aside and wait their turn, should be the firm and obstinate maintenance of the workers' standard of life.

The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): The hon. Member for Keighley (Mr. Lees-Smith), who has just sat down, intimated at the beginning of his speech that we are approaching the end of a rather lengthy series of Debates. In other words, our financial vessel is approaching harbour, and we hope to see it safely berthed in the course of the next hour or so. I think I may say that those who are responsible for the navigation have no reason to look back with anything but satisfaction upon the voyage that, we have made. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden), at an early stage of our Debates, prophesied that we should have a very stormy course, and he told us that when we got into Committee we should have—I think he directed his observations expressly to myself—as active and penetrating criticism of our proposals as we could wish for. Well, I think the right hon. Gentleman, in prophesying that storm, was the victim of what is not an uncommon experience, and that the wish was father to the thought. I am sorry that he is not present, in order that I might have asked him whether he is satisfied with the fulfilment of his prophecy, because I can only say, speaking from the other side, that we look back upon the voyage that we have made, and we have had nothing more to contend with than pleasant ripples on the surface of very smooth and sunlit waters.
But before I go more in detail into the proposals of the Bill and into the Debates to which we have listened, I hope it will not be thought inappropriate if I say, at this stage of our financial legislation, and certainly in no pharisaic spirit, that we may congratulate ourselves on the contrast between our own position and that of our friends and Allies just across the Channel at the present moment. I am quite certain that we, in this House, wish our French friends a happy issue out of all their afflictions. We wish them well in every possible way, and certainly it is not any part of our duty to say to what extent, if at all, their troubles are due to avoidable causes. But we, at all events, may congratulate ourselves that, if we are in comparatively smooth financial waters, it is due mainly to the fact that during the last very strenuous decade of our history, the House of Commons has
never hesitated to ask the British taxpayer to make the necessary sacrifices and to bear the necessary burdens to keep our finance upon a sound basis, and that the British taxpayer has responded to than demand, if not with active cheerfulness, at all events with complete resignation.
Although, as I have said, we are at the harbour mouth after a comparatively smooth passage, I do not think anyone can deny that we must have very considerable anxiety for our next voyage. The paralysis of the terrible coal stoppage continues, and we cannot yet foresee the end. We have had, in the course of this afternoon's Debate, a very penetrating and analytical speech from my right hon. Friend the Member for West Swansea (Mr. Runciman), in showing what results, from the point of view of the national finance, come from that stoppage. I remember very well the right hon. Gentleman on the Second Reading of the Bill estimated that the loss, owing to the coal stoppage and the general strike, amounted to a sum of £30,000,000. He has told us this afternoon that up till now it is likely to approach £150,000,000, in view of the coal stoppage still going on. In view of the development, it is possible that the estimate is an under-estimate rather than an over-estimate of the serious consequences of the present position. In this connection, I should like to remind the House of what was said on the Second Reading of the Bill on this point by my right hon. Friend the Chancellor of the Exchequer. He said:
Two or three weeks' stoppage is recoverable. Eight or ten weeks will make a deep mark on the livelihood of the whole people. Twelve or fourteen weeks will probably mean that it will be two or three years before the country can recover. These are facts which we must face."—[OFFICIAL REPORT, 20th May, 1926; Vol. 196, cols. 507–8.]
That is a serious warning of what may happen if the stoppage is continued over the longer period to which my right hon. Friend then referred. It is quite clear that whatever be the Estimates, be they accurate or inaccurate, or whatever form they take, the present stoppage must hove a very serious effect on next year's revenue. That is perhaps especially the case—and the cause of our anxiety—in view of the very important change in the system of our chief tax
collection which is embodied in the present Finance Bill. I can only express the earnest hope that nothing that may result from this stoppage, no loss, to make it necessary in any way to reconsider or to modify the proposals which are in the Bill. At all events, it is quite clear that the position must give us cause for anxiety. It is for that reason, if for no other, that we need every penny of revenue that we can get. That is absolutely necessary. That necessity made it quite impossible during the Committee stage of the Bill for the Government to make the concessions which were asked for in various parts of the House, both on this side and on the other, concessions on points of merit with which there certainly was the warmest sympathy, but it was quite impossible for us to make in view of the probable cost to the Exchequer.
The hon. Member for Keighley devoted a large part of his speech to the question of Income Tax. One of the concessions demanded by the Labour party in Committee was that a larger allowance should be made in respect of earned income. The hon. Member in his speech has made an attack upon the Government on the ground that they have had too little regard for that particular description of Income Tax payer. The hon. Gentleman entirely overlooks the fact that in the Budget of last year my right hon. Friend made a very large concession to that precise species of taxpayer. The Labour party, in this respect, has shown itself totally against what was said by the lion. Gentleman who has just sat down, for, in spite of what he said, we on this side of the House very thoroughly recognise the distinction he attempted to draw between earned and unearned income. We on this side recognise the higher claim of earned income for consideration if concessions can be made. The right hon. Gentleman the Member for Colne Valley (Mr. Snowden) made it the chief ground of his complaint that my right hon. Friend has made too large a remission of direct taxation. I do not see how his statements, made time after time in various places, that all remission of direct taxation is financial wrongdoing, are to be reconciled, first of all, with the persistent demand from the benches opposite in Committee for a greater consideration for SOME branches of in-
come. The Socialist party profess to object to indirect taxation in any shape or form. I would like in this connection to submit to the House that, in dealing with this question of direct and indirect taxation, hon. Members opposite are constantly guilty of falling into a very specious fallacy. In regard to the new taxation proposals in the Bill, they appeal constantly to the principle of the ability to pay. That principle is completely accepted on both sides of the House, but the fallacy to which I refer of the Labour party is this: It is very easy to take a single isolated tax by itself, and to say that this tax does not observe the principle of placing the burden on those best able to pay. That principle cannot be applied in regard to a single isolated tax. It must be taken over the whole field of taxation.
If the principle is applied over the whole field of taxation, then it would be seen that the principle, thoroughly sound, of putting the burden where there is the ability to pay, is very substantially and completely observed in the whole system of our taxation. Hon. Members opposite have made much of this supposed dualism —of the direct taxation falling upon the rich and indirect taxation falling upon the poor. But it is not true that direct taxation falls exclusively upon the rich, or indirect taxation upon the poor. Indirect taxation falls, as the rain from Heaven, upon the just and the unjust alike, and upon people of all classes of income. It is not by any means, or even especially, or exclusively, a tax that falls upon the poor alone. When we come to the new indirect taxation, so far from falling exclusively or mainly upon the poor—as suggested by the charge levelled by the right hon. Gentleman—the greater part of it falls really upon the well-to-do. There is no fairer form of tax than the tax which falls upon the article of luxury used or enjoyed by the well-to-do, and which can be quite fairly and properly avoided by anyone who does not wish to use that particular article.
It is, as my right hon. Friend has said in effect, voluntary taxation. There cannot be anything fairer than that a person who is in receipt of a certain income and a state of life that warrants it, spending large sums of money on luxuries such as motors, or champagne,
or expensive cigars—there is no reason in the world why there should not be as weighty taxation of these articles as possible, and it is the height of absurdity to say that such taxation, dealt with in broad general terms under the designation of indirect taxation, by implication falls exclusively upon the poor.
The hon. Member for Keighley professed just now to define the distinction between the Labour party and those of us who sit on this side of the House, but I noticed—by an oversight probably —he omitted to refer to one distinction which some of us regard as a very important distinction between the two sides of the House. I go hack to the early stages of the discussion on this Bill. I remember that both the great financial pundits of the Socialist party, the right hon. Gentleman the Member for Colne Valley and the right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham), made a most violent complaint that throughout our financial legislation we were showing an undue regard for the agricultural industry. The hon. Gentleman opposite did not say a word about that. May I
remind the House that the right hon. Gentleman the Member for Colne Valley said that the agricultural interest was a parasite upon the industry of the country. He also said that
The farmers were the pampered darlings of the Tory party.
I should like to assure the right hon. Gentleman, who is not present to hear my words, that in a great many parts of the country—and I can speak for the agricultural population of my own constituency—they are evincing an amount of interest in the right hon. Gentleman that they never showed before. I am extremely grateful to him for having supplied me with some good bread to throw upon the waters, which will be returned to me after many days, when we have another Election. When the right hon. Gentleman speaks of the agricultural industry in the way he does, and says that the farmers are the pampered darlings of the Tory Party, I am not at all ashamed that it should be said that we consult the interest of what, after all, is still recognised as the greatest British industry. I do not think there is anything of which to be ashamed in a party of which that can
be said, or that our party should show some regard for conditions in that great industry and for those engaged in it. That is not the only matter in connection with this Bill which gives great satisfaction in the rural districts. In those districts there is the very greatest pleasure at the provision or anticipated provision made by my right hon. Friend this year for the secondary or unclassified roads. It is more interesting to find that that part of the Bill is causing the satisfaction it is, since one of the storms with which we were threatened was with regard to what was called the raid on the Road Fund.
The right hon. Gentleman the ex-Chancellor of the Exchequer spoke of it as theft. That was on one occasion. It is quite true that on another occasion he said it really all depended upon the amount of money in the Fund. He said that if the Fund were only large enough,
there would be no objection to the House of Commons revising its allocation. That struck me as being a departure from the high regard for principle which he professed on another occasion. I think that what was spoken of in the early days as "a raid on the Road Fund," which was to cause so much trouble, is now, at any rate, as far as I can ascertain, accepted, not only in this House but really throughout the country on the whole as a very reasonable proposition. [HON. MEMBERS: "No, no!" and "Hear, hear!"] All I can say is that that is the experience which I have had in going about the country and in talking about this proposal.

8.0 P.M.

Mr. DUNCAN: None of the motoring organisations take that view.

Mr. McNEILL: My time is short, but I should like to repeat what I said on the Second Reading, that the really distinguished feature of this Finance Bill is not any changes in the taxation which is being imposed, but rather changes in the method of financial administration. First of all, I must refer, although I have already spoken of it to-day, to a very important part of this Bill, namely, that which proposes a far-reaching simplification of the whole of the Income Tax Law, carrying out a recommendation of the Royal Commission on Income Tax. I submit to the House that this is a feature
of the Finance Bill of 1926 which will give it a really notable place in the financial history of this country when all the minor matters—such as the Betting Duty, the Duty on Wrapping Paper, and other things which we have discussed—are entirely forgotten. The great change in the incidence of Income Tax from the three years' average to the previous year's assessment will remain notable, and will be remembered very greatly to the credit of my right hon. Friend the Chancellor of the Exchequer. It is not a little significant that the whole of Part IV of this Bill, which embodies this change in a number of very far-reaching Clauses, has passed through the Committee of this House, and through the Report stage in this House, without a single challenge of a word, and with only one small Amendment being put down for dealing with it. That is a very great tribute, both to my right hon. Friend for his policy and to the experts who have been responsible for the form in which those changes appear in the Bill.
Then there is another change—I am dealing now with administrative changes —which did not entirely escape criticism, but which did not encounter any storm That was the Clause by which we have put an end to the forestalling of duties. The fact is that even now we are still feeling the effects of the enormous forestalling which took place last year, both in regard to the Silk Duties and to the Motor Car Duties. The Clause which we have put in the Bill is one which, I think, will be accepted both in the House of Commons and in the country as the proper way to deal with this question, because, whatever views any hon. Member may take as to the desirability or otherwise of an import duty, he must agree that if a duty is to be imposed, that duty should find its way into the Exchequer.
There has been another change which comes under the same head of administrative changes, and that is the stabilising of Imperial Preference. My hon. and gal lint. Friend the Member for Leith (Captain Benn), with his usual ability, argued strongly at all stages of our Debates against this proposal, and his view was supported elsewhere in the House. I cannot help thinking that there is something extraordinarily inconsistent in hon. Members laying great stress upon the contention that it is utterly impossible for
this Parliament to bind any future Parliament on this or anything else, when they are the very same hon. Gentlemen who, with regard to the Road Fund, are never tired of saying that we are, and ought to be, bound by something which was done five or six years ago by a previous Parliament. The hon. and gallant Gentleman said again to-day that this stibilising of Preference would have no effect, and was of no value. I do not agree with him. I think it is of very great value. It is quite true that it cannot bind future Parliaments, but it is not at all true that, as the hon. and gallant Gentleman said, it will mislead the Dominions
The Dominions are quite familiar enough with our Parliamentary Constitution to know, as well as he does, and as well as I do. that nothing which this House of Commons can do can absolutely bind a future Parliament. But it is notice to them and it is notice to our own people that our policy is embodied in this stabilising for 10 years of Imperial Preference. It is also notice to them, if they are aware, as I believe they are, of the value of Imperial Preference, that if they place either of those other parties in power they do so at their peril. I do not for one moment think that either the people of this country are willing to do that, or that the Dominions would regard that with equanimity. But I sometimes hear from the benches opposite a protest that we on this side of the House have no monopoly of care for the Empire. That I freely admit. I have listened to admirable speeches on different aspects of Imperial development from some hon. Members opposite with which T entirely agree. Nor do we say for one moment, as is sometimes alleged, that. Imperial Preference is the only way by which yon can promote Imperial development or trade in the Empire. All that we say is that it is one way, and a very good way and that it is the way which has been accepted by the Dominions themselves. It has been pressed upon this country by the Dominions, and it has been accepted fin both sides as one important method of carrying out the Imperial policy. I regret very much that it can be said, as it can he said, that so far as this par- titular method of Imperial development is concerned we have a monopoly. I should be very glad to share that mono-
poly with hon. Gentlemen opposite. I think it would be very much better that this great Imperial policy, accepted and approved by the Dominions, should not be the monopoly of any political party in this House. But hon. Gentlemen opposite cannot have it both ways. They cannot get up in this House and constantly refuse to support us in this policy, and then contend that in that respect they share with us any credit that this policy may bring.
There are three chief changes of taxation made in this Bill. They divide themselves naturally into three categories. I shall not have time to do more than merely enumerate them. First of all, there is the change of taxation made for the purpose of safeguarding, of which the example in this Bill is the duty to be placed upon wrapping paper. I would unhesitatingly accept the challenge made in the course of the Debate upon that duty if time did not make it impossible for me to do so. Secondly, there is the duty whose purpose is not safeguarding But simply the simplification of administration. That is the extension of the import duty to commercial motor cars. That is not done for the purpose of safeguarding nor primarily for the purpose of revenue, although it is welcome on that ground, but, as my right hon. Friend explained at the outset, it is for the purpose of the simplification of machinery, and to get over difficulties with which we were faced, and which were almost insuperable. Then we have the third change of taxation, and that is the duty to be imposed for revenue purposes, and for revenue alone. The chief example of that is that duty which has had directed against it more opposition than any other part of the Bill, the Betting Duty. I only wish I had time to deal with it on the lines of the speech delivered by my hon. Friend the Member for Oldham (Mr. Duff Cooper) this afternoon, which I thought was a most admirable exposition of the ethics of the Betting Duty, and I should like to have rather developed this argument and to show that if the moral issue is to be raised at all, it is one which we on this side of the House should not for a moment shrink from entering upon. I myself feel that, so far from there being anything derogatory to those who are anxious to see the moral interests of the
nation promoted, our proposals promote those interests. I am convinced that in so far as betting is a social evil—and it is a social evil, not because it is wrong or immoral in itself, but because of the extent to which it is practised—this tax will put a control, and, as we maintain, a diminution, upon that habit which will really be for the advantage of the community.
I am sorry to say that my time is too short to enable me to develop that argument. I must admit that, so far as the Betting Duty is concerned, it is certainly experimental to a great extent. We do not know exactly how it will work out, though we believe it will give us valuable revenue and that it will diminish the evil of betting. Some people imagine that it will give us more

than we are expecting. If so, that, at all events, will not be a cause for tears. The present Budget was framed, as we all now realise, at a moment when we were, perhaps, rather more optimistic of the future than it is possible to be to-day, but it imposes no fresh taxation on the general taxpayer. The most important of the proposals which it contains have beers, as I think the Debates have shown, accepted, in the main, both in the House and in the country as a very reasonable way and a very fair way of dealing with the financial difficulties with which the country is faced.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 324; Noes, 117.

Division No. 383.]
AYES.
[8.12 p.m.


Acland Troyte, Lieut.-Colonel
Cassels, J. D.
Everard, W. Lindsay


Agg-Gardner, Rt. Hon. Sir James T.
Cautley, Sir Henry S.
Fairfax. Captain J. G.


Ainsworth, Major Charles
Cayzer, Sir C. (Chester, City)
Falie, Sir Bertram G.


Albery, Irving James
Cayzer, Maj. Sir Herbt. R.(Prtsmth.S.)
Fermoy, Lord


Alexander, E. E. (Leyton)
Cecil, Rt. Hon. Sir Evelyn (Aston)
Fielden, E. B.


Alexander, Sir Wm. (Glasgow, Cent't)
Chadwick, Sir Robert Burton
Finburgh, S.


Allen, J. Sandeman (L'pool, W. Derby)
Chamberlain, Rt. Hon. N. (Ladywood)
Ford, Sir P.J.


Amery, Rt. Hon. Leopold C. M. S.
Chapman, Sir S.
Forestier-Walker, Sir L.


Applin, Colonel R. V. K.
Charteris, Brigadier-General J.
Foxcroft, Captain C. T.


Ashley. Lt.-Col. Rt. Hon. Wilfrid W.
Chilcott, Sir Warden
Fraser, Captain Ian


Astbury, Lieut.-Commander F. W.
Christle, J. A.
Fremantle, Lt.-Col. Francis E.


Astor. Maj. Hn. John J.(Kent,Dover)
Churchill, Rt. Hon. Winston Spencer
Gadie, Lieut.-Colonel Anthony


Atholl, Duchess of
Marry, Reginald George
Gates, Percy


Baldwin, Rt. Hon. Stanley
Clayton, G. C.
Gilmour, Lt.-Col. Rt. Hon. Sir John


Balfour, George (Hampstead)
Cobb, Sir Cyril
Glyn, Major R. G. C.


Balniel, Lord
Cochrane, Commander Hon. A. D.
Goff, Sir Park


Barclay-Harvey, C. M.
Colfox, Major Wm. Phillips
Gower, Sir Robert


Barnett, Major Sir Richard
Conway, Sir W. Martin
Grant, Sir J. A.


Beamish, Captain T. P. H.
Cooper, A. Duff
Grattan-Doyle, Sir N.


Bellairs, Commander Canyon W.
Cope, Major William
Greene, W. P. Crawford


Benn, Sir A. S. (Plymouth, Drake)
Couper, J. B.
Greenwood, Rt. Hn. Sir H. (W'th's'w, E)


Bennett. A. J.
Courtauld, Major J. S.
Grenfell, Edward C. (City of London)


Berry, Sir George
Courthope, Lieut.-Col. Sir George L.
Gretton, Colonel Rt. Hon. John


Bethel. A.
Cowan, Sir Wm. Henry (Islingtn., N.)
Grotrian, H. Brent


Birchall, Major J. Dearman
Craig, Ernest (Chester, Crewe)
Guinness, Rt. Hon. Walter E.


Blades, Sir George Rowland
Craik, Rt. Hon. Sir Henry
Gunstion, Captain D. W.


Blundell, F. N.
Croft, Brigadier-General Sir H.
Hacking, Captain Douglas H.


Boothby, R. J. G.
Crooke, J. Smedley (Deritend)
Hall. Lieut.-Col. Sir F. (Dulwich)


Bourne, Captain Robert Croft
Crookshank, Col. C. de W. (Berwick)
Hammersley, S. S.


Bowyer, Capt. G. E. W.
Crookshank,Cpt. H.(Lindsey,Gainsbro)
Hannon, Patrick Joseph Henry


Boyd-Carpenter, Major Sir A. B.
Cunliffe, Sir Herbert
Harland, A.


Braithwaite, A. N.
Curtis-Bennett, Sir Henry
Harmsworth, Hon. E. C. (Kent)


Brass, Captain W.
Curzon, Captain Viscount
Hartington, Marquess of


Brassey, Sir Leonard
Dalkeith, Earl of
Harvey, G. (Lambeth, Kennington)


Bridgeman, Rt. Hon. William Clive
Dalziel, Sir Davison
Harvey, Major S. E. (Devon, Totnes)


Briggs, J. Harold
Davidson, Major-General Sir J. H.
Hawke, John Anthony


Briscoe, Richard George
Davies, Dr. Vernon
Headlam, Lieut.-Colonel C. M.


Brocklebank, C. E. R.
Davies, Maj. Geo, F.(Somerset,Yeovil)
Henderson, Lieut.-Col. V. L. (Bootle)


Brooke, Brigadier-General C. R. I
Davies, Sir Thomas (Cirencester)
Heneage. Lieut.Col. Arthur P.


Broun-Lindsay, Major H.
Davison, Sir W. H. (Kensington. S.)
Henn, Sir Sydney H.


Brown, Col. D. C. (N'th'l'd., Hexham)
Dawson. Sir Philip
Hennessy, Major J. R. G.


Brown, Brig.-Gen. H. C.(Berks, Newb'y)
Dean, Arthur Wellesley
Herbert, Dennis (Hertford, Watford)


Buckingham, Sir H.
Dixey, A. C.
Herbert, S. (York. N.M., Scar. & Wh'by)


Bull, Rt. Hon. Sir William James
Dixon, Captain Rt. Hon. Herbert
Hilton, Cecil


Bullock, Captain M.
Drewe, C.
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.


Burman, J. B.
Edmondson, Major A. J.
Hohler, Sir Gerald Fitzroy


Burney. Lieut.-Com. Charles D.
Elliot, Major Walter E.
Holbrook, Sir Arthur Richard


Butler, Sir Geoffrey
Ellis, R. G.
Holland, Sir Arthur


Butt, Sir Alfred
Elveden, Viscount
Holt, Captain H. P.


Cadogan, Major Hon. Edward
England, Colonel A.
Hope, Capt. A. O. J. (Warw'k, Nun.)


Caine, Gordon Hall
Erskine, Lord (Somerset,Weston-s-M.)
Hope, Sir Harry (Forfar)


Campbell, E. T.
Evans, Captain A. (Cardiff, South)
Hopkins. J. W. W.


Hopkinson, Sir A. (Eng. Universities)
Morrison, H. (Wilts, Salisbury)
Skelton, A, N.


Hopkinson. A. (Lancaster, Mossley)
Morrison-Bell, sir Arthur clive
Slaney, Major P. Kenyon


Horlick, Lieut.-Colonel J. N.
Murchlson, C. K.
Smith, R. W. (Aberd'n & Kinc'dine, C.)


Horne, Rt. Hon. Sir Robert S.
Nail, Lieut.-Colonel Sir Joseph
Smith-Carington, Neville W.


Howard, Captain Hon. Donald
Nelson, Sir Frank
Spender-Clay, Colonel H.


Hudson, R. S. (Cumbert'nd, Whiteh'n)
Neville, R. J.
Sprot, Sir Alexander


Hunter-Weston, Lt.-Gen. Sir Aylmer
Newman, Sir R. H. S. D. L. (Exeter)
Stanley, Lord (Fylde)


Huntingfield, Lord
Newton, Sir D. G. C. (Cambridge)
Stanley, Hon. O. F. G. (Westm'eland)


Hurd, Percy A.
Nicholson, O. (Westminster)
Storry-Deans, R.


Hurst, Gerald B.
Nicholson, Col. Rt. Hn W.G.(Ptrst'ld.)
Stott, Lieut-Colonel W. H.


Hutchison,G.A.Clark(Midl'n & P'bl's)
Nield, Rt. Hon. Sir Herbert
Streatfeild, Captain S. R.


Illffe, Sir Edward M.
Nuttall, Ellis
Stuart, Crichten-, Lord C.


Inskip, Sir Thomas Walker H.
Oakley, T.
Stuart, Hon J. (Moray and Nairn)


Jacob, A. E.
O'Connor, T. J. (Bedford, Luton)
Styles, Captain H. Walter


Joynson-Hicks, Rt. Hon. Sir William
O'Neill, Major Rt. H in. Hugh
Sueter, Rear-Admiral Murray Fraser


Kennedy, A. R. (Preston)
Oman, Sir Charles William C.
Sugden, Sir Wilfrid


Kidd. J. (Linlithgow)
Ormsby-Gore, Hon. William
Sykes, Major-Gen. Sir Frederick H.


Kindersley, Major Guy M.
Owen, Major G.
Tasker, Major R. Inige


King, Captain Henry Douglas
Perring, Sir William George
Thorn, Lt.-Col. J. G. (Dumbarton)


Kinloch-Cooke, Sir Clement
Peto, Basil E. (Devon, Barnstaple)
Thompson, Luke (Sunderland)


Knox, Sir Alfred
Peto, G. (Somerset, Frome)
Thomson, F. C. (Aberdeen, South)


Lamb, J. Q.
Plelou. D. P.
Thomson, Rt. Hon. Sir W. Mitchell-


Lane Fox, Col. Rt. Hon. George R.
Pilcher, G.
Tinne, J. A.


Leigh, Sir John (Clapham)
Power, Sir John Cecil
Titchfield, Major the Marquess of


Lister, Cunliffe, Rt. Hun. Sir Philip
Pownall, Lieut.-Colonel Sir Assheton
Tryon, Rt. Hon. George Clement


Little, Dr. E. Graham
Preston, William
Vaughan-Morgan, Col. K. P.


Lloyd, Cyril E. (Dudley)
Price, Major C. W. M.
Waddington, R.


Locker-Lampson, G. (Wood Green)
Radford, E. A.
Wallace, Captain D. E.


Locker-Lampson, Com. O. (Handsw'th)
Raine, W.
Ward, Lt..-Col. A.L.(Kingston-on-Hull)


Loder, J. de V.
Ramsden, E.
Warrender, Sir Victor


Lowe, Sir Francis William
Rawson, Sir Cooper
Waterhouse, Captain Charles


Luce, Maj.-Gen. Sir Richard Harman
Rees, Sir Beddoe
Watson, Rt. Hon. W. (Carlisle)


MacAndrew, Major Charles Glen
Reid, D. D. (County Down)
Watts, Dr. T.


Macdonald. Sir Murdoch (Inverness)
Remnant. Sir James
Wheler, Major Sir Granville C. H.


Maedonald, Capt. P. D. (I. of W.)
Rhys Hon. C. A. U.
White, Lieut.-Col. Sir G. Dalrymple


Macdonald, R. (Glasgow, Cathcart)
Rice, Sir Frederick
Williams, A. M. (Cornwall, Northern)


McDonnell, Colonel Hon. Angus
Richardson, Sir P. W. (Sur'y, Ch't'y)
Williams, Com. C. (Devon, Torquay)


Maclntyre, Ian
Roberts, E. H. G. (Flint)
Williams, C. P. (Denbigh, Wrexham)


McLean, Major A.
Roberts, Sir Samuel (Hereford)
Williams, Herbert G. (Reading)


MacMillan, Captain H.
Robinson, Sir T. (Lanes, Stretford)
Wilson, M. J. (York, N. R., Richm'd)


Macnaghten, Hon. Sir Malcolm
Ropner, Major L.
Wilson, R. R. (Stafford, Lichfield)


McNeill, Rt. Hon. Ronald John
Ruggles-Brise, Major E. A.
Winby, Colonel L. P.


Macqulsten, F. A.
Rye, F. G.
Windsor-Clive, Lieut.-Colonel George


MacRobert Alexander M.
Salmon, Major I.
Winterton, Rt. Hon. Earl


Maitland, Sir Arthur D. Steet
Samuel, A. M. (Surrey, Farnham)
Wise, Sir Fredric


Makins, Brigadier-General E.
Samuel, Samuel (W'dsworth, Putney)
Withers, John James


Malone, Major P. B.
Sandeman, A. Stewart
Wolmer, Viscount


Manningham-Buller, Sir Mervyn
Sanders, Sir Robert A.
Womersley, W. J


Margesson, Captain D.
Sanderson, Sir Frank
Wood, E. (Chest'r, Stalyb'dge & Hyde)


Marriott, Sir J. A. R.
Sandon, Lord
Wood, Sir H. K. (Woolwich, West)


Merriman, F. B.
Sassoon, Sir Philip Albert Gustavo D.
Wood, Sir S. Hill- (High Peak)


Meyer, Sir Frank
Savery, S. S.
Woodcock, Colonel H. C.


Mitchell, S. (Lanark, Lanark)
Scott. Sir Leslie (Liverp'l, Exchange)
Worthington-Evans, Rt. Hon. Sir L.


Mitchell. W. Foot (Saffron Walden)
Shaw, Capt. Walter (Wilts, Westb'y)
Young, Rt. Hon. Hilton (Norwich)


Moore, Lieut.-Colonel T. C. R. (Ayr)
Sheffield, Sir Berkeley



Moore-Brabazon, Lieut.-Col. J, T. C.
Shepperson, E. W.
TELLERS FOR THE AYES —


Moreing, Captain A. H.
Simms, Dr. John M. (Co. Down)
Colonel Gibbs and Major Sir




Harry Barnston.


NOES.


Adamson, Rt. Hon. w. (File, West)
Cowan, D. M, (Scottish Universities!
Hartshorn, Rt. Hon. Vernon


Alexander, A. V. (Sheffield. Hillsbro')
Crawfurd, H. E.
Henderson. Right Hon. A. (Burnley)


Ammon, Charles George
Dalton, Hugh
Hirst, G. H.


Attlee, Clement Richard
Davits, Rhys John (Westhoughton)
Hirst, W. (Bradford, South)


Baker, J. (Wolverhampton, Bilston)
Davison, J. E. (Smethwick)
Hore-Bellsha, Leslie


Barnes, A.
Day, Colonel Harry
Jenkins, W. (Glamorgan, Neath)


Barr, J.
Dennison, R.
John, William (Rhondda, West)


Batey, Joseph
Duncan, C.
Johnston, Thomas (Dundee)


Beckett, John (Gateshead)
Fenby, T. D.
Jones, Henry Haydn (Merioneth)


Benn, Captain Wedgwood (Leith)
Gillett. George M.
Jones, J. J. (West Ham, Silvertown)


Bowerman, Rt. Hon. Charles W.
Gosling, Harry
Jones, Morgan (Caerphilly)


Bromley, J.
Graham, D. M. (Lanark, Hamilton)
Kelly, W. T.


Brown, James (Ayr and Bute)
Graham, Rt. Hon. Wm. (Edin.,Cent.)
Kennedy, T.


Buchanan, G.
Greenall, T.
Kenworthy, Lt.-Com. Hon. Joseph M.


Cape. Thomas
Grenfell, D. R. (Glamorgan)
Kenyon, Barnet


Charleton, H. C.
Griffiths, T. (Monmouth, Pontypool)
Kirkwood, D.


Clowes, S.
Grundy, T. W.
Lawrence, Susan


Cluse, W. S.
Guest, Haden (Southwark, N.)
Lawson, John James


Clynes, Rt. Hon. John R.
Hall, F. (York, W. R., Normanton)
Lee. F.


Collins, Sir Godfrey (Greenock)
Hall, G. H. (Merthyr Tydvil)
Livingstone, A. M.


Compton, Joseph
Hamilton, Sir R. (Orkney & Shetland)
Lowth, T.


Connolly, M.
Hardle, George D.
Lunn, William


Cove, W. G.
Harris, Percy A.
MacDonald, Rt.Hon.J.R. (Aberavon)




Maclean, Nell (Glasgow, Govan)
Short, Alfred (Wednssbury)
Varley, Frank B.


March, S.
Sitch, Charles H.
Viant, S. P.


Montague, Frederick
Smillie, Robert
Wallhead, Richard C.


Morrison, R. C. (Tottenham, N.)
Smith, Ben (Bermondsey, Rotherhithe)
Walsh, Rt. Hon. Stephen


Murnin, H.
Smith, H. B. Lees- (Keighley)
Watson, W. M. (Dunfermilne)


Naylor, T. E.
Smith, Rennie (Penistone)
Watts-Morgan, Lt.-Col. D. (Rhondda)


Oliver, George Harold
Snell, Harry
Webb, Rt. Hon. Sidney


Palin, John Henry
Snowden, Rt. Hon. Philip
Wedgwood, Rt. Hon. Josiah


Pethick-Lawrence, F. W.
Stephen, Campbell
Westwood, J,


Potts, John S.
Sullivan, Joseph
Wiggins, William Martin


Richardson, R. (Hougton-le-Spring)
Sutton, J. E.
Williams, David (Swansea, E.)


Runciman, Rt. Hon. Walter
Thomas, Sir Robert John (Anglesey)
Williams, Dr. J. H. (Lianelly)


Sakiatvala, Shapurji
Thorne, G. R. (Wolverhampton, E.)
Wright, W.


Salter, Dr. Alfred
Thurtle, E.
Young, Robert (Lancaster, Newton)


Scrymgeour, E.
Tinker, John Joseph



Scurr, John
Townend, A. E.
TELLERS FOR THE NOES.—


Shaw, Rt. Hon. Thomas (Preston)
Trevelyan, Rt. Hon. C. P.
Mr. Hayes and Mr. Charles Edwards.


Question put, and agreed to.

Orders of the Day — NEWCASTLE-UPON-TYNE CORPORATION BILL [Lords (By Order).

Ordered, "That Standing Orders 82, 211, 236, and 237 be suspended, and that the Committee on the Bill have leave to consider the Bill to-morrow."—[The Chairman ref Ways and Means.]

Orders of the Day — PALESTINE AND EAST AFRICA LOANS [GUARANTEE].

Considered in Committee under Standing Order No. 71A.

[Mr. JAMES HOPE in the Chair.]

Motion made, and Question proposed,
That it is expedient to authorise the Treasury to guarantee the payment of the principal of, and the interest on, the following loans:

(a) a loan to be raised by the Government of Palestine not exceeding an amount sufficient to raise four million five hundred thousand pounds; and
(b) a loan to he raised by the Governments of Kenya, Uganda, Northern Rhodesia, Nyasaland, or Tanganyika not exceeding an amount sufficient to raise ten million pounds;
and to charge on the Consolidated Fund any moneys required, to fulfil any such guarantees as aforesaid."—(King's recommendation signified.)

Lieut.-Commander KENWORTHY: On a point of Order. Might I put it to you, Mr. Hope, that these two loans are distinct, and that it would be for the convenience of the Committee if they could be taken separately, because they deal
with distinct questions? One loan is for Palestine and the other is for Kenya, and I put it that they should wit both be taken in one Motion.

The CHAIRMAN: An Amendment may be moved to leave out either one or the other.

Captain BENN: Is it not the practice, if an hon. Member fake exception to a complicated Question, that the Motion is then put in its separate parts?

The CHAIRMAN: That is not necessarily so. A discussion may take place on one part or another by an Amendment.

Mr. WILLIAM GRAHAM: May I put this point to you, Mr. Chairman? Hon. Members are desirous of raising specific issues. There are hon. Members who wish to discuss the general finance of the scheme as embodied in the Financial Resolution, and I want to know if we should be prevented from doing that by the separation of the Motion into two parts.

The CHAIRMAN: I think such a discussion should take place upon an Amendment. On that hypothesis the discussion may be resumed or a general discussion will take place until an Amendment is moved. It is highly probable, however, that the right hon. Gentleman will have an opportunity of saying what he wants to say before an Amendment is moved.

Mr. GRAHAM: It might not be generally understood that it would be for the convenience of the Committee to have a general discussion.

The CHAIRMAN: It is not improbable that, before any hon. Member desires to raise a specific issue, such an Amendment may be moved as I have already indicated.

Lieut.-Commander KENWORTHY: I want to be quite clear on this point. There are two distinct questions being considered in this Resolution, but I am in this difficulty. I am not opposed to this Resolution, but I ask you, Mr. Hope, to put it before the Committee as two separate Questions, one dealing with the Palestine loan and the other with the loan for the African Protectorates.

The CHAIRMAN: It is already apparent that one general question and two subordinate questions are involved. I think we must first deal with the larger issue.

Mr. J. JONES: Might I ask you, Mr. Hope, if the new board of guardians in West Ham are going to pursue the same policy as these new people in Palestine?

The CHAIRMAN: There is no question concerning West Ham.

Mr. JONES: It is a question of loans in West Ham.

The CHAIRMAN: There is no question before the Committee of a loan to the West Ham Board of Guardians.

Captain BENN: There are two distinct questions raised here and it is in the discretion of the Chairman to divide a complicated Question into two parts. As a general rule, when a request has been made that a complicated Question should be divided, the Chairman has divided it. A recent instance was the Motion to suspend the Eleven o'Clock Rule, when an hon. Member pointed out that that was merged in another Motion, and Mr. Speaker divided the Motion into two parts and put them separately. I submit that unless the Chair acts upon the request of an hon. Member to divide a Question, it puts hon. Members in a great difficulty, and it is susceptible of great abuse, because it would be possible for the Government to put down one Money Resolution covering several Bills. The practice of the House in the case of a complicated Question is that it should be divided and put in and the different parts put separately.

The CHAIRMAN: I remember that in the case of the Finance Bill of 1909 I once put a similar point of Order to Mr. Emmott in Committee on the Finance Bill, and I got no satisfaction. There are three questions raised here. The first one is:
That it is expedient to authorise the Treasury to guarantee the payment of the principal of and the interest on the following loans,
and then come the amounts of the respective loans to be guaranteed.

Colonel WEDGWOOD: Has you attention, Mr. Hope, been called to the fact that these two loans which are to be guaranteed are really on a very different footing? The first one, to Palestine, is in the nature of a funded debt already held by the Palestinian people, and a large part of it is not new money; whereas the loan to the African Colonies is all new money. I submit that that raises two completely different questions, one of settlement obviously to the advantage of this country such as we are trying to effect at the present time.

The CHAIRMAN: Really, that is a matter for me. As a matter of order, I have ruled that an Amendment to confine the discussion to one or the other question would be perfectly in order.

Mr. JONES: Might I be allowed to ask .a question? In view of this question, seeing that West Ham represents a population greater than Palestine—

The CHAIRMAN: Mr. Amery.

The SECRETARY of STATE for the COLONIES (Mr. Amery): As I understand the position, what the Committee is being asked to approve of to-night in this Financial Resolution is the general principle of Imperial guarantee for a series of loans which will be raised, not by two Governments, but by six or seven Governments. One of these Governments is the Government of Palestine, in the case of which the total amount is £4,500,000, while the others are the Governments of various territories in East Africa. I will certainly endeavour, if it is of any help to the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), so far as the discussion of the details of this Resolution justifies it, to separate the two main aspects of the question, and I hope, therefore, that no inconvenience will arise if the hon. and gallant Member wishes to confine himself later mainly to one of those two aspects. I should like, first of all, to deal with the larger item of the African loans and then go on to the proposal with regard to Palestine. I do not
think that, as far as my hon. Friends behind me are concerned, there is any difference of opinion on the matter of utilising the financial credit of this country for developing the resources of the British Empire, but I may, perhaps, remind them that the Prime Minister, in the statement of policy which he laid before the country at the election, declared that
The best hope of industrial revival lies, in toy opinion, in the development of the resources and trade of the British Empire. The policy of encouraging mutual trade in the Empire by measures of Imperial Preference, and of using our finance to promote Empire development and Empire settlement, is one which we shall steadily keep to the front.
I do not think it is necessary for me to-night to argue in detail the general case for the development of Empire trade. I think it is sufficient to point out that the prospects of our trade with Europe since the War have changed very much from what they were before, and that the need of an alternative expanding market, more particularly for our manufactures, is marked. Nor do I think it is necessary to point out the extent of our economic dependence upon the United States. There was a time when our excess of imports from that great country largely represented the annual return upon our immense, investments. Those investments were sacrificed in order to help us win the War. To-day we buy something like £200,000,000 more a year from the United States than they buy from us, and we have to pay large sums annually in clearance of our honourable debt obligations; and anything that will enable us to draw upon other sources rather than the United States, especially sources linked with our financial system, would immensely relieve that position, as it will also be relieved, so far as we-can establish credits in the Empire by the sale of our manufactures, and by paying the United States in raw materials and other products from the Empire itself.
I should like to say one word about that part of the British Empire which is more particularly within the sphere of the Colonal Office, and for which the House of Commons is more directly responsible—I mean the Colonial Empire. It is in itself an immense Empire, covering nearly 4,000,000 square miles, nine-.tenths of it in Africa. It has a popula-
tion of something like 50,000,000. It is a region the trade with which is essentially complementary—trade which is complementary not only because of the natural correspondence and co-operation of the products of the tropics with the industries of the temperate zone, but also because at present, and I believe for a long time to come, the products of our Colonial Empire, more particularly in Africa, will be primary products of the farm and the mine, and not competing products of industry. There are many in this House who have doubted the wisdom of a too rapid development, even in agriculture, as regards its effect upon the welfare of the native population. I do not think that anyone in this House would like to see a forced industrialisation of the natives of Africa. The expansion of our trade with the Empire as a whole has been a marked feature of our whole economic situation in the last 30 years, and in that imperial expansion the expansion of our trade with the Colonial Empire has been the most striking feature. If I might give the Committee one or two figures, our exports from this country to the Colonial Empire in 1905 were £17,500,000, while in 1925 they were £62,500,000. Those were mainly exports of manufactures — an essentially complementary trade. Imports —in the main essential raw materials and foodstuffs—were £18,000,000 in 1905, and 280,750,000 in 1925.
That, I think, is a very remarkable expansion. To come more immediately to East Africa, I should like to make it clear to the Committee that East Africa has certainly not been behind the rest of the Colonial Empire in development, even under present conditions of transport and communication. If I may take the various East African territories in succession, the exports of Nyasaland in 1901 were £37,000; in 1913—the last year before the War—they were £195,000; and in .1925 they were £564,000. The imports of Nyasaland in the same three years were respectively £134,000, £318,000, and £591,000. In the case of Uganda, the exports in 1901 were £32,000, in 1913, over £500,000, and in 1925 over £5,000,000, while the imports of Uganda in the same three years were £63,000, £590,000 and £2,583,000. In the case of Kenya, the exports in 1901 were £71,000, in 1913, £632,000, and in 1925, £2,750,000; while the imports for the same three years were
respectively £450,000, £1,808,000 and £5,185,000. Right through, taking the same 25 years, there has been an enormous, steady development.
Tanganyika, of course, has only recently come within the sphere of our authority, hut even there progress in the last few years has been very marked. The exports of Tanganyika in 1920 were under £2,000,000, which in 1925 they were over £3,000,000. The imports of Tanganyika were £1,630,000 in 1920, and £2,860,000 in 1925. Other figures, such as those for railway traffic—and these are of interest to us at this moment—tell the same story. The gross tonnage carried over the Kenya-Uganda Railway in 1924 was 826,000 tons, while last year it was over 1,000,000 tons. The total revenue in 1924 was £1,635,000, and last year it was £1,993,000

Lieut. - Commander KENWORTHY: Are these Government railways?

Mr. AMERY: Yes, they are run by a Joint Commission. These, I think are figures of considerable encouragement for the future, and cast an interesting light upon the pessimism that this House showed in many quarters when the proposal to build the Uganda railway was first brought forward. Mr. Labouchere said on that occasion that this railway of which I have just given the figures offered absolutely no prospect of commerce. It is true that when he spoke, the total trade was only a few thousand pounds, but last year the exports alone were over £5,000,000. Mr. Labouchere said a worse speculation could not be presented to the public than the investment of public money in Uganda.

Colonel WEDGWOOD: It has been a pretty bad speculation for the British taxpayer, has it not?

Mr. AMERY: No, the British trader has benefited, and the only reason why the British taxpayer is not getting some interest on the money spent in the original construction of the railway is because of the wise decision arrived at, if I remember rightly, when the right hon. Gentleman and his friends were in office, that the surplus earnings of the railway, at any rate till the year 1934, should go in extensions, which would he in the true and permanent interest of this country as well
as of East Africa. Even the right hon. Gentleman the Member for Carnarvon Boroughs {Mr. Lloyd George) was a little sceptical in those days. He was afraid the cost of the railway could not adequately cope with the cost of policing it against the Masai, and he thought no board of directors would dream of embarking on such an enterprise with such inadequate knowledge as was possessed by the Foreign Office at that time.
I said just now that the policy of using our finances to develop the resources of the Empire was one that was put in the forefront by the present Prime Minister, and endorsed by his followers, but I want to make it quite clear that it is in no sense a policy with regard to which, at any rate in regard to finance, we differ from hon. Members opposite. There may have been differences of opinion in 1895, but in this matter of using our finance to develop the railway system of East Africa we were given a very valuable lead by the right hon. Gentleman the Member for Derby (Mr. Thomas) in securing in March, 1924, Parliamentary sanction for a loan of £3,500,000 for railway extensions in Kenya and Uganda free of interest for five years, and the right hon. Gentleman followed up this very important instalment of policy of railway development by appointing a Commission. under the Chairmanship of my hon. Friend the Under-Secretary, in which Members both of the Labour and Liberal parties took a very valuable part, and I am only sorry those two Members are not in the House to-clay to be able to give us the benefit of their first-hand experience of these matters. That Commission produced a very valuable and important Report, and recommended that £10,000,000 in all should be spent, upon railway, harbour and road development in East Africa. I do not think it will be necessary for me to repeat the passage in their Report in which they deal with the immense importance of transport in East Africa as the key to development, not only the economic development of industries directly controlled by the white man, but no less the welfare and development of the natives themselves in the industries in which they are primarily and directly concerned.
I remember a very interesting passage in that Report where they refer to the fact that last year something like 4,000 tons of ground nuts were carried
a hundred miles on the heads of natives —an immense waste of time and also a sacrifice of what otherwise might have been earned by these people. That particular line of railway, I am glad to think, is being actually pushed forward. They recommended, therefore, that there should be an Imperial guarantee for loans up to a total amount of £ 10,000,000, and, further, that those loans, following the precedent set by the right hon. Gentleman the Member for Derby in the previous year, should be interest free for five years, and they coupled with that the suggestion that after 10 years the interest advanced by the Imperial Government should be repaid. The proposal I am bringing forward at this stage only deals with the guarantee. There is no question, as far as the present proposals are concerned, of any special concession with regard to interest as recommended by the Commission. I think that is a departure from their proposal which can be justified from the point of view that in the very large field of development which is required there is in the first line a number of measures which ought to pay their way so soon that it is not unreasonable to ask the Colonial or Protectorate Governments themselves to find that money, more particularly if, as has been recommended, they are allowed to add the interest during the period of construction to the capital cost. As regards more ambitious schemes which would require financial assistance of some kind, it would be obviously unwise to start with any of these schemes until we really have adequate information. We must know, before the expenditure of millions of money is embarked upon for many hundreds of miles of railway, which is the best route for those railways, both from the technical engineering point of view, but, also, what is equally important, from the point of view of economic circumstances, which route is likely to develop the. largest traffic and, therefore, make the railway pay at the earliest possible date.

Colonel WEDGWOOD: Does the right hon. Gentleman mean the finding of money out of the £10,000,000 loan for the railway which has been turned down by this Commission with a guarantee and also the interest paid by the State?

Mr. AMERY: The Schuster Committee took the view that it would take probably at least a couple, of years before we could know for certain what would be the right route for some of these railways or what were their prospects of paying. They recommended that when that information is to hand it would then be possible to see whether the railways should be constructed and whether their construction would only be possible at that date by some further form of financial assistance.

Colonel WEDGWOOD: Are you holding out hopes to these people that they may ultimately get the cost paid by this country?

Mr. AMERY: No. I am putting the same view that is expressed by the Committee. No time is being lost, but until the whole information is secured it would obviously be folly to start building these railways. When the full information is available, we shall know, first of all, how likely these railways are to pay, and whether they will pay from the beginning or at an early stage. We shall know what will be the financial position of the territories, and how far they will be in a position out of their own revenue to cover any possible shortage of earnings during the first few years. Failing that we shall then be in a position to decide whether to postpone the building of the railways until these territories can afford the money, or whether we should then consider some other financial assistance which would enable the railways to be constructed at once. That is the view held by the Committee under Sir George Schuster's chairmanship, which appointed some time ago, and which has produced a very interesting and valuable Report, and which, contrary to the ordinary rules of procedure in these matters, I thought it desirable to make public in order to help hon. Members and the Committee generally to realise the care with which this problem has been considered, and the impossibility of proceeding at once on large expenditure of money in some directions. It is essential that we should not act until we have reasonably full information.
The Committee divide the various proposals put before them, which already exceed £16,000,000. Schemes such as the extension of the railway from Tabora to
Mwanza, they sanction at once. In the same category, but subject to further survey in the meantime, they include a sum of £700,000 for an extension of the Kenya-Uganda line north-west from Soroti and eventually to the Nile. The survey is in order to make sure whether the line should be extended to Nimule or near Lake Albert. Similarly, they include in the same category an extension of the southern branch of the railway nearer to Lake Victoria, the Busambatia-JinjaKampala extension. In the same category they have included £1,400,000 for re-equipment and improvement of the main line of the Uganda railway. That is the bottle-neck through which all the expanding traffic of East Africa between Kenya and Uganda has to come, and I do not think that any detailed justification of that recommendation is necessary. In Tanganyika an extension of the line to Lake Victoria is already recommended. They recommend a completion of the line from Moshi to Arusha, through a fertile coffee growing area, and, incidentally, they have recommended that the line should link up with the Kenya-Uganda system, and be incorporated in that System, They also recommend the expenditure of £660,000 on a new line from Itigi to Mkalama, subject to economic report.

Colonel WEDGWOOD: Is it fair to say that they recommend these particular features of expenditure, when they have particularly said that money is not to be spent? They only recommend them provisionally until they have further information.

Mr. AMERY: If the right hon. and gallant Member will look at the Report he will see that they are convinced of the general desirability of these lines, and they have allocated certain amounts of money for the purpose, subject always to closer investigation.

Colonel WEDGWOOD: The TaboraMwanza line they have recommended definitely, but not the others.

Mr. AMERY: In the other cases it is only subject to more detailed survey. In all these matters the last think that I should like to encourage anyone of these Governments to do is to burden itself by building an unnecessary railway in the
wrong direction. I am only too glad to have the valuable help of the Committee,
and I am also anxious that we should not act before proper economical and technical surveys have determined the precise routes. The Committee also recommend in Tanganyika the Dodoma-Fife line at an estimated cost of £2,700,000 in connection with which 246,000 is allotted for surveys, after which new methods of financing construction will have to be considered, if necessary. In connection with the Dodoma-Arusha line, which is estimated to cost £1,800,000, the same conditions apply, and here they also re-
commend £46,000 for surveys. In connection with Tanganyika, they also provisionally allot an additional £360,000 for general improvement of the main line of the Tanganyika railway over and above £274,000 which they recommended in their first Report for re-equipment.
9.0. P.M.
In the case of Nyasaland, the important proposal, the key proposal, for everything else depends upon it, is the proposal to construct a railway bridge over the Zambesi, linking up the line from Beira to the Zambesi with the line to Blantyre and also the line to the Tete coalfield. In this matter the Committee have shown the caution which they have shown in all their recommendations. They consider that the bridge is an essentially desirable one to build, and they have provisionally set aside £1,500,000 for that and for railway development in Nyasaland, to be supplemented by a further £760,,000 from the old unexpended Loan Act of 1914. But they do recommend very strongly that no steps should be taken until it can be used as part of a co-ordinated scheme, which will include the whole of railway development and railway organisation from the Zambesi northwards to Lake Nyasa. This line will open up the Tete coalfields and the potentialities of those coalfields, and the Committee recommend that experts in coal mining and railway matters should go out to survey the whole of that area and present their report before any actual expenditure on the bridge could be sanctioned. Over and above that, they allocate, subject to further inquiry, and to the recommendations of the Imperial Shipping Committee in regard to the harbour at
Mombasa, the expenditure of £2,363,000 for harbour developments at Mombasa and Dar es Salaam.
Finally, they have allocated, roughly, £1,000,000 for roads, waterways, road transport, and, last but certainly not least, the development of research. This is by no means the least valuable part of the Committee's Report. They lay great stress on the importance of research, not merely as an isolated matter concerning East Africa, but as part of a general scheme of research which ought to enhance the value of every part of our territory. In the same broad spirit they urge that the research provided from these loans should be very wide in its scope—and include, not only agricultural research or even research on diseases, but also research on all matters which affect the physical and mental well being of the native population. In view of some of the criticisms which have been launched in this House upon the attitude of the settlers in Kenya towards the native problem, it is interesting to note that the Kenya Government have suggested setting aside £100,000 out of this loan money for a scientific study into all matters which affect the physical, mental, and moral well-being of the natives, their traditions of life, their habits, all of which are of immense importance in dealing with the native at a time when he is being subjected every day to a changing economic environment. The Committee again, and very wisely, recommend that, though this loan is for capital expenditure as regards the money allocated for research work it should cover, not only the bricks and mortar equipment of research stations, but also intensive work for a few years on these various problems, which, when once done, will be an immense capital asset to the countries concerned.
That is all I need to say about the broad allocation recommended by the Schuster Committee. They recommend £6,620,000 for railways, apart from over £4,000,000 concerned with two large projects which cannot mature in the immediate future; £2,360,000 for harbours, which again may be modified in consequence of the recommendations of the Report of the Imperial Shipping Committe, which I hope will be made public before long, and, lastly, the allocation
of £1,000,000 to research, roads and waterways. I have mentioned already how substantial has been the economic advance of these territories, but it may be worth while mentioning the actual expansion in revenue during the last few years in order to make it clear that in undertaking this policy of expansion we are not doing something, in regard to this guarantee, which is likely to fall directly upon the imperial Exchequer. These are communities whose revenue is developing and steadily increasing. The figures for Kenya are: revenue in 1924, £2,111,000; in 1925, £2,430,000; and in 1926, £2,516,000. That shows a steady improvement.

Sir F. WISE: Will the right hon. Gentleman say what the expenditure is?

Mr. AMERY: The expenditure was £1,861,000 in 1924; £2,339,000 in 1925; and £2,485,000 in 1926. There has been a surplus each year.

Sir ROBERT HAMILTON: Is that revenue apart from the railway revenue?

Mr. AMERY: Yes. I will give the railway revenue separately. In the case of Uganda, the revenue was £1,239,000 in 1924, against an expenditure of £918,000. In 1925 the revenue was £1,479,000 against an expenditure of £1,108,000. In 1926 the revenue was £1,306,000 against an
expenditure of £1,298,000. The hon. Member is quite right in asking for the railway revenue, as the financial position of the Kenya and Uganda Railway is of greater interest in this connection than the position of the two Colonies them-selves. The earnings of the Kenya-Uganda Railway in 1924 were £1,635,000; in 1925, £1,993,000, and in 1926, £2,009,000, and, setting off the working expenditure in each case, the surplus for 1924 was £756,000; in 1925, £903,000, and in 1926 it
is estimated at £832,000. There is thus a substantial surplus for renewals, betterment and loan charges, and the policy until 1934 is to use this surplus for the improvement, and development of the railway system in East Africa itself, and only after 1934 to deal with the question of repayment to this country of the interest on the original expenditure incurred.
In the case of Tanganyika the figures are also very satisfactory. We began in that country when it was devastated and ruined by the War. It is not fair to compare our position when we took over
Tanganyika in 1919 to what it was in 1914 when it was in German hands. In 1921–22 the actual deficit on the administration of the territory amounted to over half a million pounds. This deficit has been steadily reduced, and in 1924–25 there was a substantial surplus of not Li. short of £200,000, and, in fact, so rapid has been the recovery of this territory that it has not only paid its way during the last two years, but has steadily developed all its services, medical, educational and sanitary, and now finds itself in a position to arrange with the Treasury to pay interest to the Treasury on its principal debt of £2,096,000. Its revenue in 1924 had risen to over £1,500,000, and during the present year it is estimated it will be £2,113,000. In th7 case of Northern Rhodesia the, revenue has risen from just over £300,000 in 1924 to £356,000, the estimate for the present year, and I understand that according to the latest reports this has been substantially exceeded. In the case of Nyasaland the revenue in 1924 was £290,000, and in 1926 it is estimated at £312,000.
These figures are sufficient, coupled with all the evidence I have given as to the advancement of these territories, immediately transport is introduced, that in giving this guarantee we are not backing a venture which is likely to be a losing one and to involve, the taxpayers of this country in any obligations, but that we are simply enabling these territories to raise their money on better terms than they otherwise would with little or no risk to ourselves. We are also contributing to something which will mean a very substantial volume of orders for this country. Roughly speaking, about half of the total money expended on all this railway construction will be spent in actual orders for railway materials in this country. More than that, it will mean a general development of crade both ways, which will be of immense assistance to this country in working its way out of the difficult situation left behind by the War. I believe that we are taking a step, and I confess that I regard it only as an initial step as far as East Africa is concerned, in a policy which will be fruitful and immensely valuable in the result.
May I turn to the somewhat different problem with which we are dealing in the case of Palestine? There we are dealing with a country, not of immense spaces and immense potentialities, but a small country which has developed largely since the War and still is, within its possibilities, capable of considerable development. If I might give some of the revenue figures of Palestine to show the justification for this loan, I would say that the revenue and expenditure balanced for 1923–24 at £1,633,1000; in 1924–25 the revenue exceeded £2,100,000 and the surplus was nearly 2300,000; and in 1925–26 the revenue was very nearly £2,750,000 and the surplus exceeded £700,000. That, I think, is a very satisfactory figure.

Sir F. WISE: Why was there a Grantin-Aid in 1925?

Mr. AMERY: The Grant-in-Aid was, as far as administration is concerned, a Grant-in-Aid for Trans-Jordania, but there was also a Grant-in-Aid in respect of the defence forces which cover both Palestine and Trans-Jordania, and the justification of that lies in the fact that the recent surpluses have been in a period of rapid advance to prosperity. and that it is essential, in a small colony like that, which only three years ago was barely able to pay its way, and where we have had to cut down right to the bone, to build up something in the nature of a reserve. But I can assure my hon. Friend that we do intend progressively and rapidly to reduce any grant-in-aid that can be said to he spent even for defence in Palestine, and that position is fully accepted by the Palestine Government In trade, too, I think that the figures are interesting as justifying our policy. The total imports of Palestine in 1923 were under £5,000,000; in 1926 they were over £7,300,000. The exports in 1923 were just over £1,500,000. In 1925 they had gone down slightly to £1,200,000. It may be of interest to the Committee to have the particular figures in relation to this country. The imports to Palestine from this country, according to the Palestine statistics, in 1925 amounted to over £1,000,000; according to the Board of Trade figures they amounted to about £750,000. That, of course, is partly the difference between f.o.b. and c.i.f., and it can also be accounted for by transhipment through Egypt and other causes.
According to the Board of Trade we imported from Palestine £1,155,004 of Palestine produce in the last year.
To come to the actual purposes for which this loan is to he devoted, the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) was quite right in saying that a substantial part of the money is being raised for the purpose of repayment —in the first instance for the purpose of repayment to this country for the railways arid for expenses incurred by the Government during the period of occupation immediately after the War. The money will be used, in the first place, to repay a lump sum of £1,000,000 to the British Exchequer as part of the payment for the Palestine railway system which is being taken over by the Palestine Government.

Colonel WEDGWOOD: Part only?

Mr. AMERY: It is part and not the whole. The total value of the railway is about double. Palestine is paying £1,000,000 this year out of the, loan towards the liquidation of this debt to the Imperial Government.

Colonel WEDGWOOD: The rest remains a debt due to us?

Mr. AMERY: Yes. It is also going to pay a sum of about £260,000 in the present year in respect of a certain amount due to the Imperial Government for deficits during the period of the Imperial occupation, and for certain stores taken over from His Majesty's Government. Therefore, the total amount from this £4,500,000, or from the accumulated surpluses of the Palestine Government, which is coming directly to this country in alleviation of the burdens of the taxpayer here during
the current year, will be about £1,260,000. I do not think that critics of our policy in making ourselves responsible for the mandate for Palestine five or six years ago would have admitted for a moment the idea that Palestine would be in a position to-day to pay off so large a proportion of her obligations in this direct fashion. Over and above that, a considerable amount has been borrowed by the Palestine Government from the Crown Agents in respect of railway improvements and
other public works carried out during the last year or two. These various items, which are in the nature really of
clearing off past obligations,will
amount together to about £3,000,000. The remainder is wanted, in exactly the same way as the expenditure in East Africa is wanted, for necessary development, more particularly of railways and harbours.
There is a good deal of railway work which needs to be done. The largest items, however, will be the improvement of Jaffa Harbour and, still more important, the creation of a really adequate harbour at Haifa, which has all the natural conditions needed to make it one of the great harbours of the Middle East. I believe that a moderate expenditure—the highest expenditure estimated by the engineers and surveyors so far is £1.000,000—would provide a harbour there which would enable a very great development to take place, not only in Palestine, but, perhaps, throughout the whole Middle East, and I am not excluding even the possibility of railway development from Haifa across to Iraq.

Colonel WEDGWOOD: Will the right hon. Gentleman say whether any actual new railways have been made in Palestine?

Mr. AMERY: I do not think any new routes are being made, but I think there are some short cuts across the existing lines near Jaffa and a deviation through Jaffa itself are in contemplation. I must apologise sincerely to the Committee for having detained them at such length, but I thought that I had better, at this initial stage of the discussions upon this Measure, put fully the grounds upon which we believe that the Committee will be fully justified in sanctioning an Imperial guarantee in respect, not of a loan to be granted by this country, but of loans that are going to be raised by the various Governments concerned, loans which we believe will be amply covered by the revenues of those countries, but loans on which, in our interest as in theirs, it is desirable that they should secure the cheapest possible rate and not waste their substance upon an undue rate of interest in the general market. On these grounds I hope that these Resolutions will commend themselves to the Committee.

Mr. WILLIAM GRAHAM: My hon. Friends behind me, who have much more intimate knowledge of the territories in question that I can claim, will no doubt try to address the Committee later. All hon. Members will agree that on this occasion certain questions should be asked on the broad finance of this scheme. Beyond all doubt, the time to ask questions of that kind is the time of the presentation to the House of the Financial Resolution, the adoption of which the right hon. Gentleman has now moved. The broad facts of this case are that we in this country are asked to guarantee, as to principal and interest, an aggregate sum to be raised by those Governments of £14,500,000. While that is a small sum compared with the enormous liabilities of this country one way and another, it is not a sum the guaranteeing of which we can undertake lightheartedly or without very careful consideration at the present time. I am going to ask the Colonial Secretary to-night, and through him the Treasury for such explanations as I think the Committee should be afforded in a matter of this kind. The right hon. Gentleman has just explained to us that this loan, which is to be raised by the Government of Palestine, presumably in the open market, and which we are to guarantee as to principal and interest, is in part. a loan designed to repay to us a certain debt due on railways, and also in part to repay certain deficits associated with the period of administration. It must be plain to every hon. Member of this House at once that, as a financial proposition, a loan of that kind is to that extent at least in a different category from a loan which is raised for productive purposes for enterprises and will probably entail rather more onerous terms for the Government of Palestine than would otherwise have been the ease. What is the view of the Treasury in a problem of that kind? Are they justified in asking the taxpayers of Great Britain to shoulder the responsibility of guaranteeing as to principal and interest a loan of that description?
I pause at this stage to make it perfectly clear that we on this side of the Committee are not hostile to these schemes of development by any means. The right hon. Gentleman was so far well within the mark in saying that probably in all parts of the House there is a very keen desire to promote this development.
Although we on this side want to take very definite steps to try to secure just conditions and the best possible terms for the labour employed, it is no part of our case to oppose development. Hon. Members will not misunderstand my criticism, which is devoted entirely to the financial aspects of the claim.
Let us come, in the next place, to the larger amount involved, £10,000,000 for the East African territory. The Committee is in possession of the Report of the East African Commission and also of this later document, the Report of the Committee over which Sir George Schuster presided, which for all practical purposes should be considered to-night when this Financial Resolution is before us. The right hon. Gentleman asks the consent of the Committee to a guarantee of a loan to be raised by these Governments for £10,000,000. One would say at once that, before a request of that kind is made to the House of Commons, there should be very full information, very precise details, regarding practically the whole of the part of the enterprise we undertake. That is very far from being the case. The truth is that, as anyone who studies this Report of the Schuster Committee will see—and we are at a disadvantage in having seen that Report only to-day—the Report from beginning to end is a mass of provisional statements and ends in very grave doubt as to the economic success of a number of the schemes for which our guarantee is being given.
I invite any hon. Member, as a purely financial proposition, to look at this Report, and he will find, as regards these railways, harbours, roads and other developments, that they recommend in almost every ease that a full survey should be undertaken and. only after that survey has been undertaken, in the midst of a great deal of doubt should we embark on this guarantee for the amounts they mention from time to time. That is a very remarkable state of affairs when
£10,000,000 is involved. But, added to that, the Committee quite clearly contemplates that, particularly in the case of Nyasaland, nothing will be financially sound unless there are other changes of a substantial character in the financial and social life of the Colony involved. There are problems of land tenure and other difficulties which must be overcome to a
certain extent before a guarantee of this kind, according to this Report, is financially sound. When the right hon. Gentleman comes to-night to the Committee, while we entirely sympathise with his broad desire, we are bound to tell him at once that this provisional part of the Committee's Report is one which must occasion perfectly legitimate doubt and hesitation at this stage. We must ask him why he should go for the inclusion of the whole £10,000,000 at this time and whether that is strictly necessary while all that survey has still to be undertaken?
It is rather a remarkable fact that upon all these Financial Resolutions we do not get the direct voice of the Treasury. I would very much like to hear what the Treasury has to say about this point and about this guarantee of £14,500,000. It is true that all parties in the House are practically committed to the scheme, but that does not in any way weaken our inquiries where the financial proposals are concerned. Moreover, we should certainly have heard the Treasury when we look at this guarantee of £14,500,000 of principle and interest and at the same time know that the Government are closing down trade facilities and certain other forms of guarantee on the grounds that they are not prepared, directly or indirectly, to pledge British credit further for those purposes. There is still some remaining money available for guarantees under the Trade Facilities Act. I would like to know whether that will be available rather than an independent Bill of this kind. Clearly we are here embarking upon a guarantee of £14,500,000, when the Chancellor of the Exchequer has announced to the House that he is going to cut down as far as he can subsidies of all kinds, direct and indirect, and yet the Colonial Secretary tells us that the object of this is to enable these Governments to raise the money in the market upon rather easier terms than would he involved in the absence of the Government guarantee.
I find it very difficult indeed to understand that state of affairs, and while, as I have said, we are not opposed to the development of these territories, the finance of this proposal requires more explanation. Further, the Committee will observe that there are certain charges on these undertakings at the
present time, and the White Paper of the Government indicates that these things are to rank first—of course, after the obligations of the undertakings in force at the time of the passage of the Bill. I should have thought it would have been of vital importance to the Committee to know what these obligations are, apart altogether from the economic prospects of these districts, but no statement has been made on that point by the right hon. Gentleman. Of course, such a statement would be very largely a statement for the Treasury to make, but we have not had an opportunity of hearing the Treasury. I put in that criticism at the present stage, with this further question. If it be true that all this survey has to be undertaken, is it necessary to embark upon a guarantee of £10,000,000 in East Africa at this time; and would it not be wiser from the point of view of national finance, and without doing any injustice to these territories at all, to limit the aggregate amount of the guarantee until that information is forthcoming? We cannot separate even a £10,000,000 guarantee from existing financial conditions.
The Chancellor of the Exchequer and the Government have been reminding us in recent Debates that within the next year or two they have about £900,000,000 of maturing short-term debts, and they are anxious to get the best conditions they can for the conversion of that debt on a better basis. I agree that £10,000,000 is an infinitesimal sum by comparison, but it is the accumulation of these sums which prejudices credit because they are contingent liabilities. Accordingly, it is our duty to limit them to the very lowest point at this stage, provided we are satisfied that we are doing no injustice thereby.

The UNDER-SECRETARY of STATE for COLONIAL AFFAIRS (Mr. Ormsby-Gore): Do I understand that the right hon. Gentleman's plan to be that the Treasury should advance cash for this survey, and then, as each survey is completed, present a separate loan for each of the 15 surveys to the House of Commons.

Mr. GRAHAM: Certainly not. I do not suggest any segregation of that kind. I am suggesting at the moment that you have not made out a case for the full
£10,000,000 guarantee. My argument in support of that is the Report of the Schuster Committee. All I am suggesting at the moment is that, having regard to the arguments which the Government itself has advanced, you should lower this amount, and I think you could lower it appreciably without doing any injustice to these territories. No case has been made out for the higher sum, and that is the criticism which I advance at this stage. I cannot conclude without expressing regret that we have heard so little on the purely financial aspects of these proposals.

Mr. RAMSDEN: particularly welcome this proposal, because I feel we are now taking a real step in the direction of Empire development. We are now beginning to realise the possibilities and potentialities of East Africa, to which part of the Empire I propose to refer. By means of this guarantee we shall certainly be able to advance development in East Africa very considerably. In East Africa we are able to produce many of the foodstuffs and raw materials which are so necessary to this country, and we have heard from the Secretary of State how, year by year, they are not only increasing their exports, but are at the same time increasing their imports, particularly of goods from this country. In the future they are certainly going to play a more and more important part in relation to this country, and particulrly as regards that raw material which is so essential to the great county of Lancashire. In the past, unfortunately, we have been dependent for the bulk of our supplies on the United States, but I firmly believe that if only we can develop our Colonies in East Africa we shall in time make ourselves independent of the supplies which we now obtain from our cousins across the Atlantic. That would be a great boon indeed to the manufacturers of Lancashire.
In order to carry out this development upon which, apparently, we. are all agreed, there are two great necessities. The first is that of transport. Easy transport is essential if we are to get any real value out of these countries in East Africa as well as in other parts of the tropical Empire. That part of the proposal which applies to the construction of new railways, roads and harbours,
will be of the greatest value. There is not the slightest use in having a rich and fertile soil unless you can carry away from it the produce which is grown there. Only a short time ago I read that it required about 2,000 men to carry 100 tons of produce on their heads over a distance of 100 miles and it occupied one month. That appears to me to be a great wastage of labour. In connection with East Africa one often hears the phrase, "shortage of labour," but I think the word shortage is sometimes mis-used for the word "wastage." I think that instead of having 2,000 men employed in carrying produce in this way, they could be employed to much better advantage in producing. If by the construction of railways we can avoid this waste of labour, we shall be doing something which will be useful. The next necessity-in the development of each countries as East Africa is that we should use science to its fullest extent. We are, I hope, going to get very substantial sums from the £10,000,000 loan for this purpose It has been recommended by many different bodies because they realise that scientific research will render great service in opening up and developing East. Africa. In the report of the East Africa Committee, which was headed by the present Under-Secretary of State for Colonial Affairs, such work is strongly recommended and the Imperial Economic Committee have also recommended the use of scientific resarch to the fullest extent, while the recent report of pie East African Loan Committee also suggests such expenditure.
This report is very interesting only it appears to me that m one or two directions the Committee go wrong. Although they recommend scientific research which is so necessary, if the proper crops are to be grown and if we are to make the best of those crops, they seem to fall short with regard to one of the particular means of doing this and that is the Amami Institute. This institute was erected during the time when the. Germans were in occupation of that country, and it has unfortunately fallen into disuse. It certainly does give a great opportunity of carrying out practical experiments and research in the territories with which we are now concerned. I regret to see that the Committee were doubtful about expenditure on this institute at present and they seem to believe that no man worthy
of the post of principal of the institute would be willing to accept the responsibility unless he were assured of proper support. I do not think there is the slightest doubt that this would be given to him, and if, instead of trying to make it more difficult for this institution to commence its work, and particularly more difficult for the man who will ultimately be placed in charge of it, they had frankly recommended that we should go ahead, they would have done something much more practical. Quite recently, at the Governors' Conference held in East Africa, the decision was arrived at to make use of this place, and every body, whether it be the Imperial Economic Committee or any other body, that has investigated the conditions has recognised that the Amani Institute is the one and proper place in which this work can be done. I, therefore, sincerely hope the Secretary of State will pay no attention to this part of the Report, but go ahead and liberally supply with funds this institution, which certainly can be made of very great value.
I am afraid sometimes that some of the people who make these investigations do not always recognise what such research can do. I do not want to bore the House with examples of what scientific research has done in tropical agriculture, but I would like to refer briefly to three. First of all, I will take the growing of cotton in India, where through the proper selection of plants and the scientific growing of the cotton they were able in a certain district in India to increase the production threefold. Then, take cocoanuts. It was found there that if the proper selection of plants was made, it was very easy, indeed, to get a crop 50 per cent. higher than otherwise would he the case. Again, in a West Indian island—I think it was one of the smaller islands—some time ago the cotton crop was practically wiped out with a blight known as the cotton stainer. Fortunately, the scientific research people were able to give the necessary remedy, so that this blight has been destroyed, and it is now possible to continue growing cotton there. I hope the very greatest help will he given to the work of research, and that it will be carried out, as far as the East African Colonies are concerned, at the Institute at Amani, which is so well situated for this purpose.
It will not only be necessary to set the Amani Institute itself to work, but it is essential to see that there are the proper lands around the institute where practical work can be carried on. I hope the administration of this institute will be placed in careful hands and that it will be allowed to become a practically independent organisation, and although it has to be situated in one of the Colonies, it must not for one moment be placed under the directorate of agriculture in that particular Colony. We must remember that the institute will serve the whole of East Africa, and must not become a local affair. It seems to me that East Africa can in future become the Eldorado of the twentieth century, and if we can only use the proper means we can do our share in bringing that about.

Sir ROBERT HAMILTON: I think the whole Committee is under a debt of gratitude to the Secretary of State for the Colonies for the very admirable exposition he gave us, except that on one point I am rather inclined to agree with the right hon. Member for Central Edinburgh (Mr. W. Graham), and that is in thinking that we might have had a little more on the finance side. It is true that we had very interesting figures showing the progress of the Colonies and Dependencies in East Africa, and I, for one, assure the right hon. Member for Central Edinburgh that the security is excellent, and that it is an improving security. But that does not alter the fact that it may not be necessary, at the present moment, particularly having regard to the Report of the Schuster Committee, that the whole expenditure of the £10,000,000 should be guaranteed at a time of financial stringency. We have been waiting for the opportunity of debating this subject for some little time, and I am afraid that I must enter a complaint at once that we have only had an hour or two in which to consider this very voluminous Report, which needs very considerable study, and we have not yet had the opportunity of consulting the large-scale map for which I asked the right hon. Gentleman some time ago.
I should like to ask the Members of the Committee who are discussing this Resolution to-night how many of them know where the Soroti-Lira extension
may be, or what may be the alignment of the Busambatia-Jinja-Kampala Railway. We should have been in a much better position to discuss these matters if we had had the opportunity of seeing the projected lines before us on a large-scale map, and we are under a very great disability at present in having places quoted to us in this Report which cannot be found on an ordinary map.

Mr. AMERY: I understand that the large-scale map was sent to the Tearoom yesterday, and I hope it is there to-day. I am sorry it has not arrived earlier.

Sir R. HAMILTON: I have been looking for that map day after day for the last week or two. I gave it up to-day, and it has apparently been in for the last hour or so, since the Report was given to us. At any rate, it will be too late for most hon. Members to consult for the purposes of this Debate. The step that we are taking to-night is a new step in Imperial development. The whole country is being asked to take an interest in the development of its Dependencies oversea, not only in the interests of the Dependencies themselves, but in the interests of the whole country. It is a new departure, and the whole country is being asked to lend its credit for the development of these out-of-the-way parts of the Empire, and, therefore, it is rather unfortunate that we have not had a little more time to consider these matters before debating this Resolution. But other opportunities will occur later on, and so I shall confine my remarks to-night to the East African portion of the loan, and make them as general as I can. The right hon. Gentleman the Secretary of State, I know, realises the difficulty to which I have alluded, because in his introductory remarks to the Report he says that he has presented it at the earliest possible moment, which shows that he would have liked to present it earlier, if it had been possible
We are very glad to have had this Report, but there is so much that is left open in it, and there are so many reservations, and on the top of that the Secretary of State himself makes further reservations, that we are discussing matters on what I might call a ratter unsure basis. There are many suggestions, and those suggestions are,
hedged about with so many reservations, that there is very little that is really tangible in the Report. There are only two lines, as far as I can see, that have been definitely recommended, and those are the Moshi-Arusha extension and the completion of the Tabora-Mwanza line All the others are hedged round with reservations. I do not complain altogether about that. I think it is very desirable that we should move in this matter with the greatest caution. No greater mistake could be made than to act with precipitancy. The Committee, I think, are to be congratulated upon having so pointedly drawn the attention to the House that it is necessary to proceed with caution in these matters, and not to lay out the alignment for a railway between certain places when a railway or a road runs in several other places in the locality, until it is perfectly certain that the proposed line is the best line of route in that country, but the best, line to be chosen for that particular road or railway. The result is that a great deal of possible work under the present Resolution is pushed off into the far future, and we have to wait until all sorts of other considerations can be taken into account and thought out. As I said just now, I do not complain about that. I think you cannot act with too great caution.
I should like to draw the attention of the Committee to this point, that, after all, the amount of money that has been se aside, is a very small proportion of the £3,000,000—I am leaving out the odd money—for the extension of the railways alone. I take it the amount will be about £450,000. A large portion has been set aside for the improvement of the existing lines, and work on the existing lines, and workshops. That is quite right. If you are going to increase your feeders to the lines of railway, you must see that your main line is properly equipped, you may require to increase the width of the rails, double the line in many places, and establish workshops for dealing with the extended railway system. I would like hon. Members to bear that in mind. I think it was the late Mr. Joseph Chamberlain who said that the railway was the key to Africa. There is nothing like the laying down of a railway and the improvement of the roads for opening up the country. Our experience of every railway that has been put down is that it has succeeded.
Sometimes we have had to wait a little, but success has eventually come. I want to lay particular stress upon that point, because people nowadays are inclined to be led away in undue fashion by the motor car and motor roads. But trunk roads in Africa are very dangerous and expensive. The upkeep of a road in tropical Africa is very nearly as expensive as the making of a railway, and will not carry anything like the traffic. Roads over short distances may be very useful as feeders to the railway, and help to bring the produce in from the neighbouring country, where it is not necessary to go to great expense of the upkeep of a metal road. The matter has been very well put in the Report, and I should like to draw attention for a moment or two to a quotation from page 11 of the
Report, in which the position is very properly summed up:
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The main principle which we take to underlie his memorandum of the 18th January, 1926, namely, that railway policy in the various territories under British administration in East Africa should be regarded as a whole, and that any new construction which is of more than purely local importance should be considered in its relation to a common policy for the development of these territories, and should only he undertaken after full consultation with the Governments of all the territories concerned.
It is very important that all these various schemes in East Africa should
not be regarded in piecemeal but as a
whole, and that nothing in the nature of competition should be allowed between
lines of railways in neighbouring colonies or dependencies. We shall have very shortly a line with its terminus at Tanganyika. It is very important that the roads and railways should be so adjusted that there will be nothing in the nature of competition between them. As regards the roads I should like to refer to one particular road in a district which I have been through because the Committee recommend a road in a place where the railway already exists. It seems a little unnecessary. reasons they give for it are that the roads do not go in exactly the same line as the railway, but the matter can be hardly understood without a map. It is said that it is unnecessary to make a road along the coast from Mombassa down to Tanganyika Water. My knowledge of the country would lead me to say that
that road will be extremely useful and cover a wide area, and will help the bringing down of the produce to the main line. I should like to refer to the question of the interest on the money.
There is a very strong argument for the point of view that the Colony, which is building an undertaking on which it is spending a large sum of money, and possibly receiving nothing in return during the course of construction or for some little time, afterwards, should pay something, but perhaps it is beneath our dignity that we cannot make some easier terms for the Government of the Colony than the terms which are suggested. I can quite understand the Treasury point of view. They may say that there is a necessity that we shall receive some return for our money. It is quite right that the necessity for paying the interest on the loan should be brought home to the Colony which receives the loan, but I do think that some easement might be given to the burden of the loan during the first two or three years, even if arrangements were made whereby the loan was repaid at a later date when the undertaking had become more self-supporting or even a profit-making undertaking.
I want to say a word or two in regard to research. I want to emphasise what the hon. Gentleman opposite has said in regard to the great importance of mining. I was very glad to note that the Secretary of State has spoken specially in regard to the recommendations that the Committee make in regard to mining. I do trust that before this matter is finally disposed of it will be settled that Amani is to be so equipped as to become the most important research centre for tropical agriculture in the whole of Africa. If difficulty is found in equipping it with the best brains, nothing should stand in the way of obtaining the best possible brains not only from this country but from other countries, whether they be French, German or Italian. Science knows no frontiers, and if we have the means of obtaining the best brains where-ever they can be found, I think we ought to get them, and we ought to see that they are placed in those laboratories at Amani, which should be equipped as no other laboratories can be equipped throughout the rest of the world. The situation and the place is ideal. We all
know what the great school in Trinidad has done for agriculture in another portion of the world, and there is no reason why what has been done there should not be done in East Africa, and not only should be done but should be eclipsed. I hope we may see the Secretary of State succeed in getting Amani equipped as it ought to be.
I think hon. Members in all parts of the House will back him up in that. There should be no hesitation in a matter like this. It is no use doing a thing like this by halves. As the Committee has said it is better to leave it undone than to equip it badly or to half equip it, and Members in every quarter of the House will lend their weight to the Secretary of State if he goes to the Treasury and says that Amani must be properly equipped. The Colony of Kenya is, I believe, especially asking for a large sum to be set aside for research into native welfare, though I understand that the particular Report of the Governor dealing with this matter has not yet arrived in England. This is a matter to which the Committee should give special attention. We all know how dependent we arc in these Colonies on the native. We cannot move hand or foot without him. After all, it is the natives' own country, and we have declared our trusteeship to the natives. I am not one of those who ever thought it was desirable that the native in Africa, should be left alone to get on as best he could by himself. That could not be done. We have gone there for good or bad, and we hope it will be for the good of the natives, and we can make it for the good of the natives in the light of our past experience if we will only benefit by the mistakes of the past, and take steps to see that those mistakes shall not be repeated in the future.
I think we all realise what a mistake it has been in the past to pay insufficient attention to the welfare of the native. Take the medical question and the question of sanitation and the effect of taking the native away from his own reserve, away from his women, and putting him to work on railway works on different conditions of food and climate to those to which he has been accustomed in his own reserve, and perhaps leaving an insufficient number of natives in the reserve to provide sufficient food for the
tribe. The result undoubtedly has not been for his good. This most important of all matters should be attended to, not only for the benefit of the native, but for the benefit of ourselves in that country and for future development of the whole country. I am not an old man, but I can remember the days of Livingstone. I can remember the final breaking up of the Arab slave trade. Then I have seen the scramble for Africa by European nations. I have seen railways built in Africa for military purposes, but to-night we see the beginning of a national effort on behalf of a trusteeship which we have declared for the natives in Africa, the building of railways, ports and roads, and the making of research in the interests of peaceable civilisation and development.

Sir SYDNEY HENN: I must begin by endorsing what was said by the previous speaker in regard to the issue of this White Paper. There has not been time in the few hours it has been in our hands to make a thorough study of it, therefore I intend to refer to one or two main subjects in the Report and to say as little as I possibly can. In the first place, I think there is an hiatus in the history of this matter. It is a year since the Report of the East African Commission was issued to the public. For many months the matter was considered by the Government and eventually we were told that a Bill would be introduced to give effect to its recommendations. But it is only tonight that we learn from this Report that there has been taken away much of what was recommended by the Commission. There has been cut out from this Report a number of projects and schemes that those of us who have studied these matters for years expected would be included as some of the principal objects of the Committee's recommendation. There has been cut out the construction of the main line from the Tanganyika Central Railway down to the South Western Highlands. If there is one project among others which is important for improving the communications, this is the most important of all. There are several reasons, but I will only cite two. In the first place, it will bring into direct communication two of the largest white communities in tropical Africa which, at the present time, are entirely separated by an area of undeveloped country. The second reason is, that as long as that
country remains undeveloped by the construction of means of communication, so long will it remain the reproach of the Germans that we have taken over a mandatory territory and are not developing it as we should.
The same remark really applies to the failure to recommend a generous contribution towards the reopening and the maintenance of the Institute at Amani. I endorse all that has been said on the question of Amani this evening. I think it is its greatest failure that this Report should have passed over the matter so lightly. The members of the Committee have been ready enough to support projects where, so far as they could see, there was every likelihood of an immediate return on the money, adequate to cover the payment of interest. I could not help thinking, as the Secretary of State was reading out the figures of the profits made by the Uganda Railway in the last few years, "What need is there of a Government guarantee in the ease of a railway which is paying its way so handsomely as that is?" I do not grudge them the guarantee; but there are many other projects for the development of East Africa which really require money, and can only obtain it by means of a Government guarantee. One other project is dealt with in the Report—the Zambesi Bridge. It is quite true that a recommendation has been made to reserve provisionally a large sum for it; but I would like to urge upon the Committee that this, again, is one of the most important works required in East Africa. The development of a, great area is held up for want of that bridge. We have spent years discussing the matter, but nothing has happened to date, and now all that the Report does is to advise that another Commission be sent out to see what further recommendation can be made. This is one of the most important works for the development of Central Africa as well as East Africa, and I sincerely trust that when the Bill comes before the House there will be a strong expression of opinion in favour of constructing that bridge, even though it may entail the British Government having to fwd the interest for a. limited number of years.
It will be seen that the sum set down for the development of Kilindini Harbour is £1,800,000. I think there
must be some error in this figure. So far as I am aware, all that has been proposed in recent years is the construction of two more wharves. We have been told that so much of the work has already been done in connection with the construction of the first two wharves that some £300,000, £400,000 or £500,000 would finish those two extra wharves" making four in all. How is it possible that before those wharves can be constructed so large a sum as £1,800,000 should be required? I think that requires some explanation. Some of the money would be far better spent in other directions. In conclusion, 1 wish to say that I think it is time this Bill, in whatever form it leaves the House, was passed and the work of developing the transport system of East Africa got on with as rapidly as possible.

Mr. SNELL: I will try to compress into a very few minutes a statement as to what I personally think are the views of the majority of the Members of the Labour party on this Measure. I do not propose to criticise the details of the Schuster Report, for the simple reason that it is better not to quote it at all than to misquote it, and, like all other hon. Members who have spoken, I have not had a chance to go into it in detail and to consult the maps which are necessary to an understanding of it. There are two points of view from which to approach this question. The first is the effect which the development of Africa will have upon our home conditions and needs; and the second is as to how such development may affect those who are living in the territories affected, whether they be natives or settlers or traders. The development of territories which are required to open out to us markets for our industries at home is not a purely academic question or one for idle speculation, but is of very great urgency and real and vital importance. So we are compelled to look at it first of all from that point of view. I will not go into the reasons why the expansion of our trade is necessary if our people are to be fed in this country. That is common knowledge to every Member of the Committee, and I do not propose at this time of night to recite the reasons. I will, however, allow myself to say that the Labour party, in its approach to this
problem, has always urged the development of our national estate in this country, including the full development of our land, our minerals, and all the resources at our disposal which would provide employment for our people and enrich the nation as a whole.
If we apply the same idea to our colonial dependencies we are following out a line of consistency that means to us the development of our Commonwealth estate for the benefit of everybody concerned in it, not white settlers alone, and traders, but the humblest native who resides in Africa must benefit by these developments just as much as the richest settler or landowner who may be there. Our attitude as a Labour party has been clearly expressed in the resolution passed at the conference in Liverpool last year, and it was more clearly expressed in the Prevention of Unemployment Bill which the Labour party presented to this House in February this year. If the Committee will allow me I will read one Clause of that Bill that will express in closer language than I can, our attitude on this question. Dealing with national unemployment and development, Clause 2 says:
The Board shall have power to make advances out of the funds at their disposal, to he expended either in the United Kingdom or in any other part of the British Empire, to or through such Government Departments, Dominion or Colonial Governments, local or public authorities, or associations of persons or companies, either by way of grant or by way of loan, or partly in one way or partly in the other, and upon such terms and subject to such conditions as they may think fit, for any purpose calculated, in their opinion, to promote employment, including the better utilisation and development of land, capital undertakings, transport and mines, and electrical undertakings.
That expresses officially our attitude towards the general question, and the record of the Labour Government during its short period of office was consistent with those general lines. That is, roughly, the point of view from which we look at this problem of Colonial development as it affects our home conditions. I have not time to fill out the details or to argue upon it at any length, but will pass on to the question of Colonial development as it is likely to affect those living in the territories concerned—natives, traders and settlers. Our attitude on that matter is that,
with proper and adequate safeguards for native welfare, we are not opposed to any scheme which will promote development in Africa or anywhere else, but those safeguards are, from our point of view, essential, and we can give no support to any scheme which will leave it in doubt whether the rights of the native peoples .are being adequtely protected or not. Our final attitude towards this Measure will depend upon whether the native is going to share in the benefits it is sought to confer, whether he is going to be protected in his rights and in his security for land, and whether the taxation he is going to pay is going to he expended, in a great measure, upon things that will benefit him. Then we place a considerable importance upon native production, and we should like to know whether these new transport facilities—whether railways, roads, or whatever they may be—are going to help the native to produce more in his own way for his own needs, or whether he is going to be made into a new kind of wage slave on his own territory. We are rather alarmed at the outlook owing to certain information which comes to us from time to time from those territories themselves. For instance, a resolution passed by a conference of settlers' representatives from all the East African Colonies, which was called. by Lord Delamere at Tukuyu, in Tanganyika, in December of last year, states that
The active encouragement by Government of the growing by natives of economic crops such as Arabian coffee, tobacco, and cotton, in European-settled areas, was to be deprecated.
That is, very frankly, the view of the white settlers in East Africa, and we very much want to know what the Government attitude upon that matter is going to be. We stand for what we may roughly call the West African method of production in these matters rather than the plantation system, which the white settlers in Kenya and elsewhere would appear to desire. The motive of the resolution I have quoted seems to be clearly to keep the natives in such a position that they will be compelled to work for the white settler, and that raises a question which I hope the House, at subsequent stages of this Measure, will take into account. We should like to be-assured that there really is a labour
supply available for the operation of these railways when they are built. We are quite aware that, as was pointed out by the hon. Member for North Bradford (Mr. Ramsden), if you waste human energy you are doing wrong, but it may happen that you may build a railway through a particular territory with the only result of draining from that territory the labour which ought to be kept on it for the agricultural purposes and needs of the tribes who live upon it. That is a very great danger which I hope will not be overlooked.
Then we should like some assurance, either now or at a later period, in regard to compulsory labour. In some districts the labour is simply not there, or at least, it cannot be spared from its rightful purpose of producing food on the land which the natives occupy, and anything that would bring compulsion upon the native to leave his home and his land, and to undertake speculative work on a railway some distance away, is not going to help African development in the way we desire to see. Therefore, we shall be entirely opposed to the starting of any system of wage slavery along those lines. Finally, we want to be assured that, wherever labour is employed in this developmental work, it will be adequately paid, and the labourers will be properly treated. Some reference bas been made to-night to the likelihood of great development of trade with these areas if this development takes place, and we are told that it would lead to a great expansion in our exports, and so on. Let us assume that would be so. It would only be so if the native were well paid for the labour he did.
I do not know if the Committee would allow me to quote a statement made by the Chief Commissioner of natives races in Rhodesia last year, and what is true of Rhodesia would apply to East Africa and elsewhere. Mr. Peter Nielson, speaking at the South Rhodesian Missionary Conference in 1924, he said:
I have always found that the native who gets 20s. a month spends little or nothing in the stores; that the native who gets 35s. or 40s. spends part of his money in buying what for him may be termed luxuries—a relative term—and that the native who has become skilled enough to earn £4 or £5 a month spends all or nearly all his wages in providing himself with what he has come to regard as necessaries. To indulge in luxuries until they become necessaries is to raise the standard
of living. Therefore, if my observation has been sound—and I think most employers of native labour will agree with what I have said—the raising of the native standard of living so that he shall not become an inimical competitor with the white man must naturally follow the adoption of the principle of equal pay for equal work. I think it is a sound generalisation and one that applies to the Bantu as well as to Europeans, that the more a man earns the more he spends.
It is no use our spending money in East Africa or anywhere else for the development of native life there if the wages that are going to be paid are just those which will keep him on a bare subsistence level. That would defeat the very object which hon. Members have expressed as their own desire. I associate myself very fully with the desire that research work in Africa shall go on, and I think it would be a reflection upon our holding the mandated territory of Tanganyika if we were to let the great scientifific institution built up by the German nation fall into disrepair. From every point of view, from its practical utility and also from our own sense of honour, I think we are bound to keep that great institution in working order and to make it as perfect and as useful in the service as we can.
The possibilities of trade with the African Colonies are really very great if the African Colonies are properly treated. We must have long views and not short views. We must not think what is going to pay a given dividend this year or next, but what is going to happen if, taking the long view, we do the right thing, and it is interesting to note the present position. The per capita purchases of British goods in 1925 by British possessions in Africa in comparison with those of certain other countries are significant. The West African Colonies, including British Togoland, Nigeria, including British Cameroon, purchased British goods to the amount of 12s. 6d. per head. The British East African figures, based on the combined purchases from Great Britain of Tanganyika territory, and Pemba, Kenya, Uganda, and Nyasaland Protectorates, are 9s. 6d. per head as compared with 9s. from the United States and 9s. 6d. from both Italy and Spain, so that already the trade is not inconsiderable and I hope the Committee will remember that. Remember also that it can only expand
if the wages of the native are adequate and if he is given a proper chance of developing on the spiritual and educational side as well as on the material side of his life. That is all I desire to say on the question of East Africa.
I hope the Committee will allow me to say something on the other proposal, that of Palestine. Here, it appears to me, we have a problem of very great interest and complexity. Within 9,000 square miles or so we have a community of Moslems, Christians and Jews, each. with almost every possible subdivision of interest and functions of sect and nation, and the problem of settlement is very difficult. In this country our minds run upon the rough division of interest as between the Arabs and the Jewish people. I do not propose to go into that question, except to say that it is our desire on these benches to see that both have a square deal, and that if development takes place it shall be a development which will affect the whole population, to whatever race, sect or religion they belong.
There are one or two questions upon which I should like to ask information. We should like to know something more of the details of development? We have complaints from the Jewish Labour organisation that Government work in Palestine is given out to the cheapest trader by tender, and that the tender is based upon the cheapest kind of woman and child labour. We hope that this House will not lend itself to expending money in a way which is undignified in that sense. We note that very little, if any, social legislation has taken place in Palestine, so far. We would like to ask for the inclusion of a Fair Wages Clause in whatever contracts are involved in the application of this loan? Finally, we feel that contracts, whenever given, should not be made the excuse for the importation of the cheapest form of sweated labour from the Sudan or elsewhere, to the exclusion of labour amongst the Palestinian people themselves. That is a matter to which we shall have to direct the attention of the House in the subsequent stages of this discussion. For the moment, I think I may speak for practically everyone on these benches when I say that we do not wish to oppose the development
of our Colonies in any way, but we do wish, and we shall insist so far as we can, that the development shall be such as will bring blessings to the humblest person living in them as well as to those who are more prosperous.

Sir PHILIP RICHARDSON: This Debate has contained much that is of interest. I propose to add to it personal experiences. I am probably the last recently returned Member who has visited these parts of our Dominions. Listening to the Debate, I have realised the great necessity for visits on the part of Members of this House to these portions of our great Empire. I am heartily in accord with the proposals of the guaranteed loan to East Africa. I propose to deal with those portions of East Africa with which I am personally acquainted, and not with those which I have not visited. I can reassure the last speaker on one or two points. He has referred to the conference which was held at Rungwe, and if Lord Delamere deprecated the encouragement of the growth of Arabica coffee by the natives, it was because the natives had been encouraged to go in for the more easily grown Robusta coffee. My experience during a lengthy tour through these Colonies was that there is every desire to encourage the natives in every possible way.
The hon. Member referred to the question of compulsory labour. I can assure him that compulsory labour does not mean wage slavery. We all have to labour in order to pay our Income Tax according to the best of our ability. Some give their brains and some use their hands in order to maintain the services of our country. In a country where the development of the native is so very low, he has only his hands with which to perform labour. He cannot perform other services, and in certain parts of East Africa the native chiefs, not the white men, exact from the natives Income Tax, which is devoted towards the development of the country. With regard to the question of pay, we have to take the labour at the rate at which it is offered. People sell their services in order to obtain certain advantages. In East Africa you have to deal with a native in a low state of development and with very moderate desires.

Mr. J. JONES: Wallop your own nigger.

Sir P. RICHARDSON: And accordingly one question is that of educating the native so that he may develop—

Mr. JONES: With a whip.

Sir P. RICHARDSON: I do not know what I have done to merit these interruptions. They do not disturb me, because I am certain, from my experience, that the use of the whip has long since disappeared.
Great Britain in Africa has conferred certain definite advantages on the native, and I was pleased to hear the remarks of the hon. Member for Orkney and Shetland (Sir R. Hamilton). There are few persons in this House with a greater knowledge of these territories. He referred to the days of Livingstone and the slave raids. The first thing we have done is to give to the natives security for life and property. This did not exist within the lifetime of some of us. We have secured the native against the raids of the slave trader. That is the first great blessing we have conferred upon him, and we have also secured him in such property as he wishes to possess. He may have been. transferred from one district to another, but in all the many thousands of miles I travelled the natives were satisfied where they were and are enormously benefited by the administration of Great Britain. One thing which has impressed me more than anything else is the entire ignorance in this country on the condition of the natives in Central Africa. The native there has very few wants indeed, and his possessions consist in the number of his cattle. When rinderpest attacks his cattle he loses his property, and one of the blessings we have conferred on the native is the establishment of medical research for the purpose of protecting his cattle.
It is quite easy to pick small faults in an administration, but it was an eye-opener to me, in going through Central Africa, to find that one could walk more safely there than in the East End of
London, whereas only 20 years ago—[Interruption]—the reason being that the native is entirely satisfied that the white man is there as his friend and not as one who is going to exploit him. It is not the understanding of the native that he is exploited. His understanding is that from British domination he has
received enormous advantage. I went to farms, I went among the traders, and in all parts, right through from Nairobi, a thousand miles to Tukuyu and the Belgian Congo, I found that the native had benefited enormously by the presence of the white man. I have risen to bear testimony to that which the white man has done, and to the progress that we are making in those countries, and cordially to support further progress. There are very few Members, possibly, who realise the extent of this country. Even a man who had lived there for a very long time was apparently ignorant of where the Soroti to Lira line was. These are important posts giving an outlet to the cotton districts of Uganda. We have all to realise the enormous extent of this country and its enormous potentialities.
There are those who talk about the advantages which we may get through our trade, but before we obtain a reciprocal trade with the native we must understand the country in which the native is placed. There is country which is white man's country, and country which is black man's country; that is to say, country in which the white man can live and prosecute his operations successfully, and black man's country where, because of malaria, sleeping sickness and other causes, the native alone can be the worker and the white man must be the administrator. So far as Kenya is concerned, the highlands are very much a white man's country, and it is very desirable that that country should be developed from that point of view. Uganda is very much the black man's country. It is at a lower altitude, much hotter, and quite unsuitable for development by white farmers. That is an area which has been exploited by us as cotton-growing country. But whilst the natives have grown the cotton the desires of the natives for the advantages of civilisation are not so pronounced. I was talking to a planter with whom I was stopping, and congratulating him upon his native servant, who was very well dressed indeed in a white shirt. He said to me: "This is a funny country. I gave the man two months' leave, whereupon he oiled his body and covered himself with red earth, and went off on a honeymoon trip." In this part of the world people are in a very low state of civilisation.
The result of the whole of my tour was to convince me that the advent of the British people was to the very great advantage of the native. It added to their happiness and prosperity, but one thing it has not so far added in adequate measure, and that is education. Everything that adds to our knowledge of the country, everything that lends itself to research, everything that will advance the prosperity of the native means that the native will have More wants, will have more desires, will be impelled to make an effort on his own account, and then the native will be able to exchange the product of his labour in greater measure with the product of the labour of the people in this country.

Captain GARRO-JONES: Can the hon. Member give us a little information about the consumption of gin and other spirits?

Sir P. RICHARDSON: My con-consumption of gin was very small. I know nothing whatever about the consumption of gin by the natives. I can only tell the hon. Member that in all the thousands of miles I travelled I never saw a native drunk on gin. The natives are decent, clean people, who have now been freed from the domination of the Arab slave trader. This part of the world lends itself to enormous developments to the mutual advantage of the natives and ourselves. When we talk of harbour and railway development, we must not forget that it is not harbour and railway development alone that is necessary, but the development of the native, so that he will have greater wants. It is not sufficient that we should ask the native to grow cotton if the native grows rich on £5 a year and then ceases to grow cotton. That is a problem that has actually arisen in Uganda. It is not sufficient to urge him to grow coffee, if we do not educate him in the way of growing coffee. It is not sufficient to ask him to preserve and breed cattle, unless we introduce measures for preserving these cattle, which are, in fact, the natives' bank balance. We are proposing in this Measure to vote a guarantee of £10,000,000. I hope that this may be only the first of many guarantees, because East Africa is a vast Dominion with vast potentialities for
development in the British Empire, and £10,000,000 will be a mere flea-bite in its Imperial development.

Colonel WEDGWOOD: I think this House has as much reason as the native of East Africa to congratulate the hon. Member for Chertsey (Sir P. Richardson) on his safe return from this perilous voyage. I gather that to the native of East Africa as well as to the hon. Members of this House that voyage has been profitable and that we now, understanding the position, can approach with clear minds the problem that is before the Committee. It seems that East Africa is divided into good lands where the white men live, and bad lands where the black men live.

Sir P. RICHARDSON: No.

Colonel WEDGWOOD: And all that is required is to get one to go to the other. That seems to be the normal solution of things in Africa. What I am anxious about is why our money should be used to effect the union. After all, this is a Financial Resolution. We are this evening, amid hilarious joy, committing the British taxpayer to guaranteeing the interest on £14,500,000. Some goes to Palestine, some to East Africa—

Mr. J. JONES: Less than the population of West Ham.

Colonel WEDGWOOD: You could put them all into West Ham and roll them up.

Mr. J. JONES: Give us £10,000,000, and we will pay everything.

Colonel WEDGWOOD: The same thing would apply in East Africa. As this Debate rolls on, we learn one or two home truths. I am beginning to understand now why this valuable report of Sir George Schuster has been so long delayed and why it is that week after week, month after month the introduction of this Bill has been postponed. We now understand the attitude of the Colonial Secretary and above all of the Under-Secretary. They knew that that fell report was upon them—a cold water douche to succeed the generous enthusiasm of the Under-Secretary's report last year. Anyone who has read the Schuster Report will bear me out in saying that it is extremely cooling to the energies and enthusiasm of the people who imagined such great things
in the previous East Africa Report. Anyone listening to the speech of the right hon. Gentleman who introduced the Resolution, would hardly imagine that there was any conflict between the views of the Colonial Office last year and the views of the Schuster Report, but, as a matter of fact, when you look into this Report you find that the Colonial Office must have had a very bad quarter of an hour when they read it first. The Resolution is for £10,000,000. Sir George Schuster and his Committee started out with applications—more or less gingered applications—from all these four Colonies for money, but as soon as the Colonies found that they were going to have to pay interest on the loans, they became less enthusiastic, and their suggestions for assistance from the British taxpayer became more and more tentative. Still, £16,000,000 was applied for, and the committee went through the applications with some care. They did their best, and in every case where the scheme was not obviously a hopeless financial proposition they recommended that, at any rate, money should be spent on a survey. Out of the whole £16,000,000, when they had gone through it very carefully, they could only recommend the guaranteeing of enterprises amounting to £1,300,000. All the rest is postponed to another season. All the rest is to await the generous energy of the local governors in finding the proper ways to spend the money which we are now asked to guarantee. That is all very well, and we are very grateful to Mr. Schuster for this careful —[HON. MEMBERS:" Sir George!" I gather that Sir George Schuster—

HON. MEMBERS: Hear, hear!

Mr. AMERY: If I may make a suggestion to the right hon. and gallant Gentleman, I would say he has obviously had no chance to develop his views on this subject to-night, and there are other Members who wish to speak. On the other hand, there is the Report stage and also the Second Reading of the Measure and, if the suggestion meets with the right hon. Gentleman's approval, perhaps we might take this stage to-night. If it does not meet with the approval of the right Lon. Gentleman and hon. Members opposite, I should not like to press the suggestion, but as there will be more than one occasion for dealing broadly and on general lines with this subject, I put
before the right hon. Gentleman the possibility of taking this stage to-night.

Lieut.-Commander KENWORTHY: I would point out that £4,500,000 of this sum is for Palestine, and, with the exception of about four sentences by the hon. Member for East Woolwich (Mr. Snell) and of course the somewhat elaborate speech of the right hon. Gentleman in what was really a statement introducing the Colonial Estimates, no mention of Palestine has been made in the Debate.

Colonel WEDGWOOD: I hope the right hon. Gentleman will not press for the passing of this stage to-night.

Mr. AMERY: I will not press it any further if the right hon. Gentleman disagrees.

Mr. J. JONES: On a point of Order Is it possible on this Resolution to introduce the case of West Ham?

Colonel WEDGWOOD: I do not think—

It being Eleven, of the Clock, the Chairman left the Chair to make his Report to the House.

Committee report Progress; to sit again To-morrow.

Orders of the Day — EXPIRING LAWS CONTINUANCE BILL.

Considered in Committee.

[Captain FITZROY in the Chair.]

CLAUSE 1.—(Continuance of Acts in Schedule.)

Mr. NEIL MACLEAN: I have handed in an Amendment, in page 1, line 17, to leave out Sub-section (1), and to insert instead thereof a new Sub-section:
(1) The Acts mentioned in Parts I and II of the Schedule to this Act shall, to the extent specified in column 3 of that Schedule, be continued until the 31st day of March., nineteen hundred and twenty-seven shall then expire, unless further continued or repealed by the passing of such Acts as will consolidate the enactments desired to be continued.

The DEPUTY-CHAIRMAN: I think the hon. Member's intention is that all the Acts mentioned in the Schedule shall expire at the same date.

Mr. MACLEAN: No. The point is to continue for nine months all the Acts that are mentioned.

The DEPUTY-CHAIRMAN: As I read the Amendment, it seems to me that the effect would be that all the Acts mentioned in the Schedule would expire on the 31st March, 1927, and, if that be the case, the simplest way for the hon. Member to achieve that result would be by moving, in page 1, line 17, to leave out the words "Part I of," and not to insert any words there at all. That would have exactly the same effect as the words proposed by the hon. Member.

Mr. MACLEAN: But if you look at Sub-section (2), Mr. Deputy-Chairman—

The DEPUTY-CHAIRMAN: Leaving out Sub-section (2) would come as a consequential Amendment to the one which I have suggested.

Mr. MACLEAN: I beg to move, in line 17, to leave out the words "Part I of"
I accept your guidance in this matter, and am quite prepared to take your advice. An Amendment similar to the one I am moving, certainly in regard to an alteration of the date has already been accepted. It was explained at the time that the Amendment was
this day six months.
That applied to the Acts in both Sections of the Expiring Laws Continuance Bill which finished upon separate dates.

The DEPUTY-CHAIRMAN: I was only suggesting what I did as a simple way of attaining exactly the same respect to the one the hon. Gentleman desires in the manuscript Amendment that he has handed in.

Mr. MACLEAN: That would limit discussion to these two Bills in Part I of the Schedule, whereas I wanted to get rid of the whole thing at one swoop. wished reference to be made to Bills in both parts of the Schedule.

The DEPUTY-CHAIRMAN: I do not think the hon. Gentleman has quite understood me. He mentioned leaving out Part I. An Amendment to leave out what he suggests would include all the Acts mentioned in both parts of the Schedule if Sub-section (2) were subsequently deleted from the Clause.

Mr. MACLEAN: My point was, that in this Amendment the matter should be made perfectly clear. Everyone knows the various Acts that it is suggested should be continued in both parte of the Schedule. There is, for example, the Labourers' (Ireland) Act, 1883. There are the Amending Acts. Other Acts are in the same condition—with five, six, seven or more amending Acts. These amended Acts it is proposed to continue in this particular Expiry Laws Continance Bill. I want to put it to the right hon. Gentleman who may be in charge of the Bill that it is time that something was done by this House to bring these Acts into consonance with each other so as to make their reading clear, and more simple and understandable than at present, and not only to the lay but the legal mind. A lawyer has not only to wade through the principal Act, but all the subsequent modifications or amplifications of it. The Act I have just quoted is an outstanding example of what is required to be done by the House to simplify the legislation of the country. This Labourers (Ireland) Act, 1883 finds the circumstances of the day entirely different to those of the time when it was originally passed. We have now two Governments in Ireland. At that time Ireland was governed by the Secretary of State for Ireland from this House and by this House. Now that there has been a change in the government of Ireland you are still referring to the Labourers—

The DEPUTY-CHAIRMAN: I do not think it would be in order upon this particular Amendment to go through all the Acts in the Schedule. The hon. Member must give sonic reasons why all the Acts in the Schedule should come to an end in December, 1927; we cannot go into the merits of the Acts.

Mr. MACLEAN: I am not going into the merits of the Labourers Act. I have merely made reference to that Act and the amending Acts. I am using this Act and the amending Acts as an illustration, and I am using the changed situation in Ireland as something to enforce my illustration. My argument is that these Acts, which have been so largely amended, should be brought forward in a consolidated form. I wish to give the Government time to go into this matter and have such Acts as this one put into such a form that they will be easily read, easily under-
stood and easily quoted by any lawyer who is entrusted with a case under the scope of the Acts. I submit that there is no occasion for us to continue these Acts. In one case it is proposed to continue until the 21st day of December, 1927, those Acts which are mentioned in the first part of the Schedule, and with regard to the second part of the Schedule, to continue until the 31st day of March, 1928. This Bill comes before us year after year, and we find Acts with their large tails and amending Acts, and it is high time the Government, and I hope this Government, will at last do something to get rid of these Acts, which were passed originally for three and for five years and which have been continued for 40 or 50 years. It is high time these Acts were consolidated, and that we should get on with the real business of the House and not continue on the Statute Book Acts that in many cases are obsolete.

The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): I hope the hon. Gentleman will not mind if I begin by entering a very mild protest against his having delayed so long in handing in this Amendment.

Mr. MACLEAN: There is no discourtesy intended either to the Financial Secretary or to the Committee. The Bill only passed its Second Reading at half-past eleven last night, and it was impossible for me to go to the library then and draft Amendments and hand them in, because the Clerks would have been gone. I wrote out the Amendment and handed it in early this afternoon.

Mr. McNEILL: I did not accuse the hon. Member of any sort of discourtesy. I see that it was difficult for him to have handed in the Amendment earlier, but, at the same time, it is difficult for me to deal with it. However, I will do the best I can. I did not quite gather from the speech of the hon. Gentleman what his actual complaint is.

Mr. J. JONES: On a point of Order. In view of the difficulties which have arisen, would it be possible to move to report Progress?

The DEPUTY-CHAIRMAN: I cannot accept a Motion to report Progress.

Mr. McNEILL: The complaint of the hon. Gentleman is one with which, in substance, I am in very great sympathy.
When we have a principal Act and a number of amending Acts, we all know that it is a difficult and complicated process to ascertain the existing state of the law. I understand that what the hon. Member wants is to get these Acts codified. If time and opportunity serve, the codification of laws is always desirable; but how does the hon. Gentleman connect that with his proposal? In point of fact, he is proposing to do away with the Expiring Laws Continuation Bill by destroying its purpose. The whole object of that Bill is to continue for a year the Statutes mentioned in the Schedule, which in the ordinary course would expire at the end of the year, in this case December, 1926. The hon. Member proposes that they should expire three months afterwards, on 31st March. The House generally meets somewhere about the end of the first week in February, and in a short period has to deal with a great mass of financial proposals, and if those lapsing Acts were to be continued, we should, in that short and crowded period of the Session, have to pass another Expiring Laws Continuance Bill. That does not seem to be a very reasonable proposal, and even if it were done I do not see that it would make it easier to codify this legislation; indeed, it would make it more difficult, because Parliamentary time could not be found for passing a codifying Bill, even if one could be prepared in the time. The Committee accept the view, I think, that these Statutes have to be continued in some form or other, and unless it is the hon. Member's object to prevent the continuance of these Statutes, I would beg him not to press this Amendment, which, as I say, would defeat his main object.

Captain BENN: Would he explain this one point to us? I confess I do not understand why it is that the Acts mentioned in Part I of the Schedule last until December, 1927, and those in Part II till March, 1928. Why are those dates chosen?

Mr. McNEILL: The reason is this. Ordinary legislation runs to the end of the calendar year, and as a rule an Act begins on the 1st January. But the Statutes mentioned in Part TI are financial Statutes and it would be a very great inconvenience if they did not run —expire or begin—with the financial year. They are concerned with rating, and as the hon. and gallant member
knows, there are grants out of the Consolidated Fund under those Acts which are worked in with contributions from the local rates. The striking of those rates takes place half-yearly or quarterly, as the case may be, and it would create the greatest confusion if the financial year did not coincide with the commencement and expiry of those Acts.

Captain BENN: The right hon. gentleman put his complaint against the hon. Member for Govan (Mr. Maclean) so courteously that I should hesitate to retort, but there is one very obvious reply. He complains that we have not put Amendments on the Paper. The fact is that the Government passed the Second Reading of the Bill only 24 hours ago and insisted on the Committee Stage being taken to-night in flat defiance of the recommendation of the Select Committee under General Seely, appointed in 1922. The Committee said:
That Bill is regularly introduced and passed through all its stages, under great pressure of time, at the very end of the Session, when serious discussion is not practically possible. That is a point of grave objection.
I think it is rather hard on my hon. Friend that when he hands in an Amendment hastily in circumstances which are a defiance of the recommendation of the Committee, he should be chastised for not having his Amendment on the Paper. I do not see why all these Measures should not expire on one date. I understand the codifying of these Measures means a great saving of Parliamentary time, but I cannot see why, if the financial date is important, they should not all expire on the financial date, because the date of the Finance Bill is later. If the Government cannot find time to renew these Acts in this way they should put them permanently on the Statute Book. This is not an original suggestion but one which was made by a distinguished occupant of the Front Bench to an earlier Government which sat on those Benches. I would suggest to the Financial Secretary that he should fix the date in Subsection (2) of the Clause and then we should know where we are, I cannot see that anything the Financial Secretary has said is a defence of two dates and this constitutes an extremely complicated provision.

Mr. JONES: Might I be allowed to asked about the case of West Ham. The Bill dealing with the West Ham Guardians places a limit of 12 months and that period will be up in 1928. I want to know is it included in this Bill?

Amendment negatived.

Clause ordered to stand part of the Bill.

CLAUSE 2.—(Short title and application to Northern Ireland.)

Captain BENN: I beg to move, in page 2, to leave out Sub-section (2).
Sub-section (2) of Clause 2 reads as follows:
This Act shall apply to Northern Ireland in so far as it deals with any enactment relating to a subject with respect to which the Parliament of Northern Ireland has not power to make laws, but subject to this provision this Act shall not apply to Northern Ireland.'
The position of Northern Ireland, as I understand it, is governed by the Government of Ireland Act, 1920, by which Ireland was divided up and certain powers were given to Northern Ireland, and the Government of Northern Ireland has operated under those powers ever since. It was declared in that Act that certain powers would not, be exercised by the Government of Northern Ireland, and, on the other hand, powers were given to the Government of Northern Ireland to make laws for the government of that part of the country. Some of the Acts in the Schedule to this Bill apply only to Ireland, for example, the Labourers (Ireland) Act, 1883, but apparently, under Sub-section (2) of Clause 2, this Act is not to apply to Northern Ireland. That is a mystery to me. The Labourers (Ireland) Act clearly deals with matters in regard to which the Northern Ireland Parliament has power to make laws, namely, labour, sanitation, and so forth. I do not know whether my mind is confused on this matter, or whether there is some simple explanation, but I put it to the right hon. Gentleman that it does require some explanation. If he can make it clear to me, I shall be very grateful. Otherwise, perhaps it would be wise to strike out altogether Sub-section (2) of Clause 2.

Mr. McNEILL: The answer to the hon. and gallant Member's question is really a simple one. As he knows, under the
Act of 1920, there are certain subjects which are transferred and some that are reserved. This Measure, by the Subsection which the hon. and gallant Member desires to leave out, enacts that, as far as the reserved subjects are concerned —that is to say, those subjects over which this Parliament has power of legislation—it shall apply to them. If the hon. and gallant Member will look at page 5 of the Bill, he will see included there various Acts which apply to reserved subjects, and which are consequently renewed, if they are renewed at all, by this Parliament. The Sub-section to which the hon. and gallant Member refers comes under the same category. It is quite true that, speaking generally, the Government and Parliament of Northern Ireland would have a right to legislate on the subject of labourers, but this particular Act, I think I am right in saying—though I confess I am speaking from memory—is specifically among those subjects which are reserved by the Act of 1920.

Captain SENN: Of course, the right hon. Gentleman speaks with great knowledge, but I have looked up the Act of 1920, and I am certainly greatly surprised to learn that this Act of 1883 deals with reserved subjects.
It is an Act to better the condition of labourers in Ireland. I may be wrong, but I shall be very much surprised to hear that the Government of Northern Ireland has not power to deal with the matters to which its Clauses relate. If it has, let us see what is being done by these subsections. They are being deprived of the benefit, if it is a benefit, of the Act of 1883, and it is expressly provided in this Sub-section that the Labourers (Ireland) Act shall not apply to Ireland. Where it is to apply to if it is not to apply to Ireland I do not know. I shall be very grateful if some Member of the Government or some Member of the Parliament of Northern Ireland will explain whether these matters are not in fact within the competence of their Parliament.

Mr. D. REID: The learned and gallant Gentleman has referred to Members of the Northern Irish Parliament. Neither I nor my hon. and learned Friend beside me (Sir M. Maenaghten) are Members of that Parliament There is no harm whatever done by the Bill. It is no good
looking at the Act of 1883, because there is a whole series of Acts. I have not looked the matter up, but my impression, for what it is worth, is that there are financial provisions which must be dealt with by that Parliament. But however that may be, if the Northern Ireland Parliament does not desire that these Acts should be continued they will be dropped.

Captain BENN: No, the Imperial Parliament is enacting them.

Mr. REID: The Bill refers only to Acts within the competence of this Parliament.

Mr. McNElLL: I think the learned and gallant Gentleman has in his hand the Minutes of Evidence given before the Select Committee on the Expiring Laws Continuance Act last year. If he looks at page 8, he will see that the explanation I gave was perfectly accurate.

Mr. MACLEAN: I support my hon. and gallant Friend in making inquiry as to the continuation of this particular Act. Certain powers were reserved in the Act which gave To Southern and Northern Ireland the powers of Government: but that this particular Act applies to the whole of Ireland and no Amendment of it has been passed since the passing of the Government of Ireland Act. Consequently, the original Act and the 15 Amending Acts which have been passed since the enactment of the original statute, apply to the whole of Ireland and not simply to Free State Ireland or Ulster Ireland. Therefore, whether Ulster wants it or not, it will not be dropped. If this is a reserved subject, as the Financial Secretary to the Treasury says, then, whatever the Ulster Parliament says, the last word rests with the Imperial Parliament whether it shall apply or not to Northern Ireland. I should like to know why this Act and the Amending Acts, which bear entirely upon Ireland and which, as far as I can discover, have no financial proposition in them, or any financial obligation bearing upon this country, should be a reserved subject. If the Irish Parliaments do not intend to operate these Acts—assuming they have power to do so, of which I am not sure—what is the use of continuing them as expiring laws?If on the other hand the Ulster Parliament or the Free State Parliament pass laws.dealing with
the subject, this particular Act could disappear from the list of expiring laws.

Captain BENN: I now find that the explanation is simple. The passage in the Report to which the Financial Secretary has referred had escaped my notice. I am surprised that he did not read it. This is a matter on which the Northern Parliament of Ireland can legislate, and they can, if they like, pay for it; but they do not want to pay for it. There is not power on our part to say what shall happen in Northern Ireland in regard to this matter; they have the power in regard to legislation, and the only thing we are privileged to do under this Schedule is to pay. This is a reserved subject; they have power to make their own arrangements, but they do not desire to forfeit lien which they have on the British Treasury. For that purpose this matter, which has caused so much trouble to my hon. Friend the Member for Govan (Mr. Maclean) and others, is inserted in the Schedule in order that we can go on paying for something which is within the competence of the Northern Parliament.

The SECRETARY of STATE for the HOME DEPARTMENT (Sir W. Joynson-Hicks): This is money which is advanced under the Land Purchase Act for the purpose of building labourers' cottages in Ireland, and it is all repaid. We do not have to provide the money here, as suggested by the hon. and gallant Member, without being repaid. To enable this work to be continued it is necessary to include these Acts, as has been done in Sub-section (2).

Amendment negatived.

Clause ordered to stand part of the Bill.

Orders of the Day — SCHEDULE.

Mr. MACLEAN: I beg to move, in page 3, to leave out lines 6 to 35, inclusive.
This Amendment would exclude from the Schedule the Labourers' (Ireland) Act, 1883, and all the amending Acts. I move it in order to get a statement 4if the Government's intentions. This particular Act and all these amending Acts appear every year in the Expiring Laws Continuance Bill, and I suggest it is
time that principal Act and the amending Acts were embodied in one Measure.

Sir W. JOYNSON-HICKS: I think the hon. Member is largely right in his suggestion. It would be desirable to codify these Acts, but, at present, advances are still being made for the provision of labourers' cottages in Northern Ireland, and I am sure the hon. Member would not desire that operation to be stopped. We do not know how long it will go on, but it is proceeding from year to year and, in order to enable these advances to be made and repayments to be collected, we have to continue these Acts from year to year. There is a good deal to be said for the codification of all these troublesome Acts of Parliament which have been amended in this way, and if the hon. Gentleman will devote some of his energy and ability to codifying these Acts for me I shall be glad to consider, in the course of next year, whether we could not introduce a Bill drafted by him for that purpose.

Mr. MACLEAN: Since the right hon. Gentleman invites me to codify these Acts—

The DEPUTY-CHAIRMAN: I would point out that a debate on consolidation would be quite out of order on this Bill.

Mr. MACLEAN: Are we not entitled to reply to a request for assistance from the Government Benches? If they throw out a life-line, surely we are entitled to say whether we are going to take it up or riot.

Amendment negatived.

Captain BENN: I beg to move, in page 3, to leave out from lines 40 to 44, inclusive.
The Act referred to here is the Wireless Telegraphy Act, 1904, and the position is this: The law as regards wireless telegraphy is hopelessly out of date. That is obvious from the reference to the Act of 1904. The Act has not been altered except by the Act of last year, which was passed, it will be remembered, to define transmission of messages, meaning the reception of messages, and so compelling the taking out of a licence. I do not deny the necessity of continuing in force some Statute governing wireless telegraphy transmisison, and so forth, but I think we are entitled to ask the Postmaster-General what the policy of the Post
Office is. If he is going to persuade us to give him this Act for another year will he promise within the twelve months to introduce new legislation that will bring the law up to date? A Bill was introduced last year, but was not proceeded with because the Bill gave all sorts of powers of search and other objectionable powers of investigation to the Post Office, to which objection was taken. This Expiring Laws Continuance Bill is a very great draught on the good will of Members of this House. A Bill is introduced for the first time and passed without due examination because the Government say that it is only to last for a short time, and then it is brought forward with 25 new Bills—that is what it seems to—and passes through all stages in the Committee stage of this Bill.

The ASSISTANT POSTMASTER-GENERAL (Viscount Wolmer): I have great pleasure in responding to the invitation of the hon. and gallant Gentleman, and will give him the information for which he asks. I am sure that he does not desire to press this Amendment. He realises as much as anyone that unless the Act of 1904 were kept in force the whole of the wireless services of this country, including broadcasting, would at once be plunged into chaos. He says that the Act was passed over 20 years ago, and he asks what is our policy in the matter. I think he will agree that if there is a subject on which temporary legislation is justified, that subject is wireless telegraphy. The science is as yet in its infancy, our knowledge of it is expanding daily, and our experience of it is altering every year. As one new invention succeeds another, the wireless situation in this country and in other countries is revolutionized, and a whole series of international agreements has been entered into from year to year in order to deal with the various problems that the progress of wireless telegraphy raises. Nobody knows that better than my hon. and gallant Friend, who has always taken a keen interest in wireless. It is for that reason that all Governments have felt that it has been necessary to extend this Act only temporarily. Even when his own party were in power, they extended this Act temporarily from year to year, and think they were quite right in doing so, because during that period the wireless situation was changing. It is still in a
fluid and changing condition, and until we have reached a period when wireless has got to that stability where I think we can say that steam and other somewhat ancient inventions have arrived, it would. be unwise to legislate in a per- manent sense. Therefore, my answer is that the Government think this is the right method of dealing with this question, at any rate for the time being.

Major CRAWFURD: The reply of the Assistant Postmaster-General is interesting but peculiar. He said that the fact that wireless invention was changing from year to year was a very good reason why an Act of Parliament 22 years old should he continued. It has already been mentioned that the Government did introduce a Bill on the subject last year, which was withdrawn, and, therefore, one of the Noble Lord's contentions must be wrong. If it he right to keep an Act 22 years old on the Statute Book in order to deal with changing conditions, surely it was rather a foolish performance to introduce a Bill last year. Will the Noble Lord or someone else give us some idea of what, if any, are the legislative intentions of the Government with regard to wireless telegraphy?

Viscount WOLMER: I thought I had said that our intention was to prolong this Act in a temporary fashion from year to year.

Captain GARRO-JONES: I think this Act of 1904 is being made a pretext for neglecting the duty of bringing in fresh legislation on this subject. The Noble Lord said that if anything might justifiably be made the subject of temporary legislation, it was wireless telegraphy, but surely he is not going to tell the Committee that anything in the Act of ]904 can have any usefulness or bearing on the developments of broadcasting as they exist to-day. The point we are anxious to ascertain is when the Postmaster-General is going to cease making these pretexts and bring in some kind of legislation which will have a bearing on broadcasting and wireless as they exist to-day. When this Act came into force in 1904 there was no wireless telegraphy at all. In what respect, then, can it have any effect on wireless? Is it to be understood that all this vast development is not governed by any statutory Regulation at all? That is what we are
to gather from the Noble Lord's speech, and I think we are entitled to know when that out-of-date position is going to be brought up-to-date.

Captain BENN: Will the Noble Lord tell me this: Is the Wireless Telegraphy Bill, which was introduced last year, dropped definitely and done with?

Viscount WOLMER: Yes, it is.

Amendment negatived.

Mr. MACLEAN: I beg to move, in page 4, to leave out lines 5 to 7, inclusive.
This Amendment deals with the Coal Mines (Minimum Wage) Act, 1912, which applies to given districts in Great Britain, and among other districts to the "Mainland of Scotland." In 1920 an Amending Act was brought in and the Schedule to that Act names the districts and counties to which it is to apply. There is a mine in Scotland on the island of Raasay, and although the Act is to apply to workmen employed underground in coal mines and to men employed in iron and stone mines, I am told that the minimum wage does not operate in the case of this mine. This mine is on the island of Raasay and is not on the mainland, consequently neither the Act of 1912 nor the Act of 1920 operates and the minimum wage is not paid to the miners employed at the mine. During the War I am told that German prisoners worked the mine. None of the men now engaged there are being paid the minimum wage which is paid in other districts in Scotland. I want to know whether the Government intend to make the Minimum Wage Act of 1912 and the Amending Act of 1920 applicable to this mine? I should like, there fore, to have a reply from either the Secretary for Scotland of from the Minister of Mines upon that point

12 M.

The SECRETARY for SCOTLAND (Sir John Gilmour): I think I may say that this matter will be very carefully considered, but as far as I am aware the mines in the Isle of Raasay are centainly not being worked at the present time.

Mr. MACLEAN: These mines were working during the time this Act was operating. The mines were working in
1912, 1918, and 1920; they were working during the War. What I am asking is that if in the event of any amending legislation the purpose or scope of this Act will be applied to the Isle of Raasay, and that the miners working there will receive the wages that are paid in other similar districts in England.

Sir J. GILMOUR: It is quite clear that these mines are not working at the present time. If and when the occasion should arise that the mines should be reopened and worked then the point will be considered.

Mr. MACLEAN: That is not giving me the information that I want.

Mr. BUCHANAN: Is it not a fact that, though the mines are not working, there are certain people working at the mines, and these persons, who otherwise would receive the minimum wage in other mines are not receiving it here. What we are seeking is not an assurance to receive proper consideration, but the normal assurances that these men working in competition with other mines—these miners will be subject to the same rates and conditions as in other mines. That is the only assurance we are asking the Secretary for Scotland in order that they may receive every consideration.
At the moment they are not subject to the Minimum Wage Acts, which are not applicable. What they are asking for is very simple and elementary, that if the mines are worked the Minimum Wage Acts applicable thereto shall be applied.

Captain BENN: There is another aspect of this case apart from that put forward by several hon. members, that is as to why this Act is not made permanent instead of being carried forward from year to year? The matter was considered by a Committee, and the suggestion that the Act should be made permanent was offered on two grounds by the Chairman of the Committee, and another Member. One Member said:
Suppose we do make the Act permanent, and the minimum wage given were raised in the House of Commons till then?
The other hon. Member, just after the subsidy was granted, observed:
There are all kinds of other possibilities opening up and other methods, and the mines may occupy a totally different position to that occupied previously.
Making the Act permanent will more or less simplify the principle of the minimum wage.
He says—and quite rightly—that it will be a great mistake in the interests of the men—

Mr. BASIL PETO: All I suggested was that there had been other methods of remedying matters than by merely dealing with wages.

Captain BENN: The hon. Gentleman added other words which, I think, make my interpretation agree. If not, no doubt, he will explain to the Committee why this Act should not be made permanent. It seems desirable that some reason or justification should be given why the Act should not be made permanent, but merely continued from year to year.

Mr. VARLEY: There is no point whatever in making the Act permanent, and I hope sincerely that the Government will not give way to the hon. and gallant Gentleman the Member for Leith.

Amendment negatived.

Captain BENN: I beg to move, in page 4, to leave out lines 11 to 24, in clusive.
The object of this Amendment is to leave out the Courts (Emergency Powers) Act, 1914. I do not profess to understand why it is necesasry to retain this Act, but I am perfectly satisfied with the examination made by the Committee which was appointed by this House in 1925. On page 11 we find that the Chairman said to Mr. Ram, the representative of the Department:
This Act has been continued only so far as it, relates to Orders made by any Court before the 31st August, 1922. The Lord Chancellor's Department considers further continuance unnecessary, and the Scottish Office concurs. Have you anything to say on that, Mr. Ram?
Mr. Ram replied "No," and the Chairman then said:
Then this Act, will lapse for everybody agrees.
And the Committee recommended that the Act should be discontinued. What desire to know is why that recommendation was not agreed to, and why this Act is still continued?

The SOLICITOR-GENERAL (Sir Thomas Inskip): The hon. and gallant Gentleman is quite right in saying that the Select Committee which was appointed assumed that it would probably be unnecessary to continue this particular Act of Parliament, but after the Committee
had reported further investigations, showed that there were in actual operation certain Orders that had been made under the original Act, and it was therefore necessary to continue the original Act until those Orders had been worked out, Hon. Members arc aware that this Act is an Act which gave to the Courts certain powers in regard to the postponement of financial obligations which were incurred in cases of hardship arising out of circumstances connected with the War. So long as those Orders are in operation it is necessary to continue the Act, otherwise the Orders would come to an end. I understand those Orders are rapidly disappearing with the passage of time. I hope the hon. Gentleman will take it that it is reasonable that the Act should continue.

Captain GARRO-JONES: The learned Solicitor-General stated that the Committee recommended that this Act should no longer be continued, but the point that puzzles me is how is it that when the Lord Chancellor's Department on the best legal advice recommended that the Act should not be continued, and the Scottish Office, also presumably acting on the best Scottish legal advice, also made the same recommendation, the Act should still be continued? Did those two Departments make a mistake? If so, it cannot be helped, but I think we may well ask how long it will be before these Orders referred to by the learned
Solicitor-General run out. Is this Act to be continued indefinitely, and, if not, how long is it to be continued? I think we should have an answer to that.

Sir W. JOYNSON-HICKS: Those Orders will run until they run out.

Captain BENN: The Government will not gain anything by flippant replies of that kind. If my hon. and gallant Friend's question had been dealt with courteously no more would have been said. Perhaps the Solicitor-General will now tell us how many of these Orders there are, and what sums of money are involved. I would like the Home Secretary to give a courteous
and reasonable answer to the questions put to him.

Amendment negatived.

Mr. SCURR: I beg to move, in page 4, line 26, column 3, to leave out the words "Sub-section (7) of Section thirteen."
This proposal was a War Measure passed in the interests of economy, but in regard to London government is very complicated, and so far as the London County Council is concerned it is really necessary to have the information which has hitherto been contained in these annual reports in order to secure the ordinary co-operation and a knowledge of the work. The only objection offered is the ground of expense. After all, it is necessary that the ratepayers should know how their money is being expended by the various local authorities, therefore the reports should be published annually. For these reasons I think this provision should be repealed.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): There has been some considerable discussion between the London County Council and the Metropolitan borough councils with regard to the operation of this Section. The Committee will observe that in 1855 the Metropolitan boroughs were required to make an annual report to the London County Council of their proceeding, and a list of the names and addresses of their members.
I think the issue between these two bodies is as to the way certain information should be supplied. For instance, the London County Council do not need the names of the members of these various authorities supplied to them because, fortunately, the annual reports of the Metropolitan Boroughs are usually printed and are available to the public. Therefore it is a question now as to the exact nature of the information which, under more modern circumstances, should be supplied. I think it is neces-
sary that there should be a report provided by these various authorities in order that the public and the London County Council can see exactly how the money is being spent. Consequently the Metropolitan Boroughs have asked us to postpone this matter for another year in order that some agreement may be arrived at as to the exact nature of the reports to be published. That is why we have included this provision for another year.

Mr. SCURR: I hope the ratepayers will not be deprived of this information because of the obstinacy of the Borough Councils.

Sir K. WOOD: I cannot say what will happen next year, but we do not propose to ask them to furnish the names and addresses of their members. It is our intention to get them to come to some agreement in order that proper information may be available, to the London County Council.

Amendment, by leave, withdrawn.

Captain BENN: I beg to move. "That the Chairman do report Progress, and ask leave to sit again."
The Minister in charge of public business suggested that at 12.30 we must report Progress. The next Amendment. raises the question of Alien restrictions and I suggest that this Motion should be accepted.

Committee report Progress, to sit again To-morrow.

The remaining Orders were read, and postponed.

It being after Half-past Eleven of the Clock upon Wednesday evening, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjoured at Twenty-six Minutes after Twelve o'Clock.